Article

2022-05-26 Economy

Orders for Durable Goods Fell and No One Noticed

[Breitbart] Durable goods orders were worse than they looked.

The Commerce Department reported on Wednesday that orders for longer-lasting goods from U.S. factories rose 0.4 percent in April. A big part of that was a surge in aircraft orders, a category prone to huge swings up and down as major airlines make purchases. Excluding transportation, orders were up 0.3 percent.

Orders for core capital goods orders, a category which excludes aircraft and defense purchases, were also up 0.3 percent. Core capital goods are considered a proxy for business investment and therefore a gauge of how businesses see their prospects. If businesses see a recession ahead, core capital goods orders are likely to be weak. If good times are expected to keep rolling, the orders should be strong. Note that there’s a high degree of reflexivity in this. A slowdown in orders for capital goods can actually lower economic output, even bring on a recession. So expectations become reality.

The three-tenths of a percentage point gain was good enough for Bloomberg News to run the headline: "US Durable Goods Orders Rise on Steady Business Equipment Demand." This was almost a repeat of last month’s headline: "Firm U.S. Durable Goods Orders Underscore Resilient Investment." The story explained that the durable goods orders were very good: "Orders placed with US factories for durable goods rose in April, highlighting firm and sustained demand for equipment and merchandise." In Bloomberg’s interpretation, the April numbers indicate that "companies are adhering to capital expenditures plans as they seek to enhance productivity to ease the burden of high inflation and a tight labor market."

Posted by Besoeker 2022-05-26 03:53|| || Front Page|| [11132 views ] Top

#1 Given inflation rate it makes sense to buy durable goods now, even if not quite needed yet.

Posted by Glenmore 2022-05-26 11:20|| 2022-05-26 11:20|| Front Page Top

#2 ^ Yes. They will cost more before they cost less.

Posted by M. Murcek 2022-05-26 11:27|| 2022-05-26 11:27|| Front Page Top

#3 So, do I (keep trying to) fix my old truck (19 Yrs, 303,000 miles, intermittent electrical demons), buy a new truck at $50-60,000, or go find an antique truck at auction for maybe $40,000, but with a wiring diagram that will fit on an index card and virtually EMP proof?

Posted by Glenmore 2022-05-26 18:05|| 2022-05-26 18:05|| Front Page Top

#4 /\ Absolutely valid question Glen, but only one YOU can answer. Might boil down (in my case it usually does) to 'wants vs needs.'

I'll buy a haircut every 3rd week or so, enuf gas to get to town for grub, pay the bills, keep the yard mowed, that's about it. No vacations or overseas adventures. Still try to go out to eat occasionally. If we need something, we discuss it, sleep on it, then come to a decision.

Posted by Besoeker 2022-05-26 18:34|| 2022-05-26 18:34|| Front Page Top

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