Courtesy of Karl Denninger of The Market Ticker
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.
