There’s that word again. Only in this case the word is “unexpectedly”. Bloomberg is reporting that durable goods order fell unexpectedly in September:
Orders for business equipment unexpectedly declined in September as tepid global markets gave American companies little reason to expand.
Bookings for non-military capital goods excluding aircraft dropped 0.3 percent after a 1.6 percent August decrease that was twice as large as previously estimated, according to a Commerce Department report on Tuesday. Demand for all durable goods — items meant to last at least three years — fell 1.2 percent.
Corporate investment may be slow to pick up until inventories are worked off and a pickup in foreign economies revives demand for commodities and U.S.-made goods. While weaker overseas sales have taken a toll on industrial companies from Caterpillar Inc. to 3M Co., stronger motor vehicle purchases have been supporting manufacturing.
That’s two consecutive months of decreased orders. I’ve been complaining the business investment was too weak to sustain growth for years. This at least gives me some basis.
Iva-beena-tellin-ya…..
JPMorgans Friday report will undoubtedly invoke “unexpectedly” and then tell us how robust prosperity is just around the corner. Been going on for years now.
I would note, yet again, that the “strength” in auto sales is being propped up by a one-in-three sub prime financed artificial boost, just like home mortgages.
If only we’d “invested” more in infrastructure and education….
This makes no sense. All those years of record profits. The wealthy have more money than ever. I have been told that if the wealthy get more money, they will invest it and make us all richer. Job creators I think they called them.
Just to make sure we understand Drew’s comment about auto loans, the auto loan market is about 7% of the size of the mortgage market. Car loans have much lower default rates. Even at the height of the recent recession they did not hit 3% (mortgages topped 5%). Defaulting on $30 billion worth of cars doesn’t seem like it should have the same effect as $1 trillion worth of homes.
Steve
You miss the point on the auto loans, steve. It’s not the relative size of the aggregate credit claims, it’s that auto demand is being artificially spurred by mispriced credit. The same can be said of housing right now, with artificially low mortgage rates. The easy credit trick isn’t getting us much, net, in that it’s taking purchasing power out of the hands of general savers and subsidizing auto and home buyers. And of course far fewer people will default on their car, as they value transport more than owning a home vs renting. You may think this top down economic “management” is fine. I don’t. What next, bales of money dropped from helicopters?
The way GDP is calculated has changed significantly to make presidents look better. If we were calculating it the way we did five years ago the U.S. would probably be either in or on the very edge of technical recession.
As have estimates of unemployment, employment, and the money supply. You might almost think that economists were people with all of the ideologies, political allegiances, preferences, and prejudices that people have.