The headline looks mixed -- the question is, what's inside?
New orders for manufactured durable goods in January decreased $11.8 billion or 5.2 percent to $217.0 billion, the U.S. Census Bureau announced today. This decrease, down following four consecutive monthly increases, followed a 3.7 percent December increase. Excluding transportation, new orders increased 1.9 percent. Excluding defense, new orders decreased 0.4 percent.
Transportation equipment, down three of the last four months, drove the decrease, $14.7 billion or 19.8 percent to $59.7 billion. This was led by defense aircraft and parts, which decreased $5.1 billion.
Led by, when that's 10% of the sector? Someone needs to have a bit of a clue-by-four upside the head before they put ink to paper.
We have a little problem in the internals though; as you know I follow communications and computer equipment as a solid leading indicator of the economic picture. And while there has been a two-month trend that was moderately positive, and appeared to be a potential corner last month, that has now disappeared and reversed -- violently.
There's nothing good there at all, and this terminates the premise that a potential recovery is afoot in the all-important communications and computing area -- which is a solid leading indicator for employment.
Non-defense capital goods were down 1.7% on shipments and 0.1% on new orders -- but excluding aircraft, new orders were up quite-materially. The big slash-n-burn was in defense where new orders collapsed, down almost 70%.
The report isn't terrible, but it's also not good. This series is notable volatile even in good times, but we're not looking at a strong report here. While the defense figures are undoubtedly being influenced by the sequester, on-balance the report is at best a mixed bag with a tinge of bearishness for the broad economy.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.
NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.
The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.
Looking for "The Best of Market Ticker"? Check out Ticker Classics.
Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.
The Market Ticker content may be reproduced or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media or for commercial use.
Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.