Durable Goods Orders: Not as Bad as They Seem?

According to the Census Bureau, new orders for manufactured durable goods in February decreased $3.6 billion or 1.7 percent to $210.6 billion, the second consecutive monthly decrease following a 4.7 percent January decrease. Tony Crescenzi says this report is consistent with a recession, and the market seems to agree.

However, suppose the news release had read “new orders for manufactured durable goods in February increased $8.4 billion or 4.3% to $208.1 billion compared to the year-ago period. This marks the third consecutive monthly increase, following year/year gains of 4.2% in both December and January.”

Would the market have reacted more kindly to that rephrased release? It isn’t an academic question, because either paragraph is technically correct. The Census Bureau, as is its custom, reported the one-month change after making seasonal adjustments. My alternate version simply takes the one-year change in the data before the adjustments are made.

Comments

[jimbomo:]

You make a good point and I believe we would have seen more excitement from the market if the results had been "marketed" this way. In fact, earlier this week the NAR said that sales of existing homes were up from the last month, which they were, but still down significantly from last year's same month results. But the market went up.

Personally, I think investors should be smart enough to interpret the data each way and I believe they did. The NAR data looks like the reversal of a downtrend but the durable goods data looks like a continuation of a downtrend.
Also, I'm assuming the durable goods data is raw numbers, not adjusted for inflation, and therefore maybe just flat YOY.
Jim
___________
My opinion is worth what you paid for it.

2008 Mar 26 09:26 PM