Economic Reports: Which way are we going?
By Adam Lass
In this article
April factory orders increased by some 0.3%.
Economists find cheer in 2.1% increase in non-defense capital goods.
Overall Growth has slowed to 1.6% per year, and may be revised into negative numbers at any moment.
Economic Reports: Which way are we going?
Last week I wrote about various “other shoes” falling. Today, we hear from the bean counters at Commerce that April factory orders increased by some 0.3%, missing Wall Street estimates by half.
Leading the “charge upward,” motor vehicles and parts orders fell by 3.3%, while commercial aircraft orders gave up 10.7%. And ships and boats? Sank 23.4%. Sorry, couldn't resist. But at least I didn't write about airplane orders “plunging” like another well-known news source. (Okay, it was the AP).
Actually, the AP article was quite interesting, in that it presented some rather preposterous spin: It noted that “economists were encouraged that orders for non-defense capital goods excluding aircraft -- a category considered a good proxy for business investment -- was up a strong 2.1% in April following an even larger 4.6% rise in March.”
It did not name these fellows who found such good cheer in progressively smaller gains and larger losses. One presumes that there were at least two. These same unnamed Pollyannas believe that this is the basement and claim that the economy is actually beginning to revive.
This is a similar position to the one recently stated by the Fed, which noted that while all numbers were coming in worse and worse month after month, they were inclined to believe (for reasons unstated) that things would be better soon.
These are, of course, “advance numbers,” and are subject to endless revision. Before you get your hopes too high, most revisions of late have been downwards, and some by as much as 50%.
In fact, with growth down to 1.6% per year (its slowest pace since 2002), it would not shock me if some time over the next few quarters we are informed that “we were already in a recession, but it's over now, so don't complain.”
Can I complain now instead?
***
Adam Lass is the founder and manager of the WaveStrength Group, and is a contributing editor for Taipan Financial News. As the creator of WaveStrength's proprietary analysis system, Adam's expertise has shaped a franchise of successful investment newsletters and services, including WaveStrength Options Weekly and WaveStrength Apex.
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