Warning signs – Durable Goods Orders

While most economic indicators are backward looking, durable goods orders is one that provides clues about what might transpire going forward. That´s because it is about production that will take place in the months ahead.

In general, it has conformed to the recent cycle that began in mid-2014. The up leg of this cycle, beginning in mid-2016, has been dubbed “synchronized global growth”.

While Harvey & Irma may have helped push DGO (ex-aircraft to minimize volatility), beyond where it would “naturally” go, growth is weakening.

The same pattern is visible in new orders for Nondefense capital goods ex aircraft, agood leading indicator of business investment spending.

image_pdf
Share

Leave a Reply