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September 27, 2006
August Durable Goods
(Greenwich, 9/27/2006) New orders for manufactured durable goods in August 2006 decreased 0.5%, to $209.7 billion the second consecutive monthly decrease and followed a 2.7% decrease in July. Orders were up 8.5% over year earlier figures. You can see the report by clicking here, then clicking the red Advance Report on Durable goods title.
Manufactured durable shipments increased 1.9%, to $214.2 billion, its highest level since 1992 and 7.6% above a year earlier. Capital goods shipments rose 1.4% in August, 11% higher than a year ago.
Unfilled orders increased $2.4 billion, or 0.4%, to $631.9 billion, up fifteen of the last sixteen months. This is the highest level since the series began. Inventories rose 0.2%, to $287.1 billion.
Communications equipment was a bright spot, with orders up 7.0% in August (+13.8% year over year) and shipments up 4.7% in August (+5.8% year over year.)
Motor vehicles and parts orders continued their see-saw, up big for the onth after a terrible July but only 0.5% for the year. Shipments for the year were 0.0%.
Taken as a whole the report gives a soft picture of growth, which will help keep interest rates down and support firming multiples in the stock market.
JR
Posted by John Rutledge at September 27, 2006 10:00 PM
Comments
My understanding of your market position is that the economy will see moderate growth because of the decline in housing; you see good news for stocks because low interest rates increase the discounted value of stock earnings; you see strong corporate earning; you see value in Asian markets. I kind of understand your point that inflation of assets is near zero. Does this mean that if the GNP declines to 1.5% that the long bond might trade at 3.5% or so? My portfolio is currently a little weird. I own technology and consumer cyclical stocks balanced with long bonds. The strategy is working. I bought the bonds on margin in May and July so I need 6 months to reach long term gains. Dare I try to hold?
Posted by: Jack Miller at October 11, 2006 12:19 AM