Sinking Economy

[unlawflcombatnt]

Friday's Durable Orders showed a huge monthly decline, marking a -10.2% change from the previous month. Not only did Durable Orders decline sharply, the decline was MUCH worse than predicted by the "experts." As of Monday, February 20th, the Market anticipated only a -0.3% change in Durable Orders. By Thursday, February 23rd, the anticipated decline had been revised further to -2.0%. The actual -10.2% change was markedly worse than expected. Below is a graphic representation of this decline.

http://www.briefing.com/Common/Images/Content/PageContent/EcData/durnt.gif

Below is a copy from Briefing.com showing the actual numbers.

http://i27.photobucket.com/albums/c190/unlawflcombatnt/2-24-06artDurOrdrGrphLL.gif

This information can also be found at Briefing.com's Durable Orders (http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicReleases/durord.htm)

Non-defense durable orders declined 8.1%. Capital goods orders fell even more, with a 1 month change of -23.1%. (The previous day's prediction was for a change of only 0.0%. Off just a little.) Most of this change was in Nondefense Capital goods, which experienced a -20.0% change from the previous month. (The previous day's anticipated change was only -0.2%. Again, off by a just a tad.) Machinery orders declined 2.5%.

The capital goods order decline of 23% suggests a similar decline in true capital investment. It indicates a huge decline in demand for capital goods, as well as a decline in demand for production those capital goods facilitate.
These numbers are NOT indicative of an economy that is "strong, and getting stronger." They're indicative of an economy that is "weak, and getting weaker." They're indicative of an economy that's sinking. And sinking rapidly.

unlawflcombatnt

EconomicPopulistCommentary (http://www.unlawflcombatnt.blogspot.com/)

Economic Patriot Forum (http://www.unlawflcombatnt.proboards84.com/)

The economy needs balance between the "means of production" & "means of consumption."

[sheila]

How does that equate with manufacturing employment rising rapidly?

[Silverstone]

Manufacturing rising? The only way I see this is that the government now calls a bugger flippin job a "manufacturing" position.

[GoldenSheikUrBootie]

I graduated from college 2 classes shy of being an economist. 20 years ago their wasn't much demand for an economist. I majored in Business Admin instead.

Some professors then noted that durable goods orders were the single most important figure in determining broad economic health.

I think gold went up Friday because the durable goods number was terrible. Saudi oil attack was a factor, but the US economy is clearly in trouble.

"Orders are considered a leading indicator of manufacturing activity, and the market often moves on this report despite the volatility and large revisions that make it a less than perfect indicator. These problems can be minimized by looking at the breakdown of orders. The total number is often skewed by huge increases in aircraft and defense orders. An increase based solely on strength in one sector tends to be discounted, while the market is more impressed with broadbased increases in orders. "