The Faux Recovery .vs. Durable Non-Orders


As I have repeatedly observed my favorite part of the Durable Goods survey is the communications equipment component, because it has a high correlation with hiring – that is, actual employment expansion.  Since the population expands about 1% a year this series should show clear, convincing and consistent growth.

Guess what: It’s not, and neither is the rest of the durables report this morning.

New orders for manufactured durable goods in April decreased $7.1 billion or 3.6 percent to $189.9 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 4.4 percent March increase. Excluding transportation, new orders decreased 1.5 percent. Excluding defense, new orders decreased 3.6 percent.

Yuck.  What’s even worse is here:

Nondefense new orders for capital goods in April decreased $5.3 billion or 7.3 percent to $67.6 billion.

Remember, this series is adjusted for seasonality but not inflation.  So subtract off the CPI from that number, since that’s a negative adjustment.

The table shows some nasty figures:

Find me a positive number in the new orders column.  Ok, ok, “computers and electronic products” – up 0.7%.  Everything else…. not.  And note, that’s in “electronic products”, not computers themselves, which were down 4.4%.

This report is terrible folks, especially coming in the “meat” of the “QE2” program.

Bernanke: FAIL.

The Market-Ticker