Durable goods new orders are one of the "official" leading indicators for the economy, giving us a good picture of where the producer side of the economy is likely to be in about 3 months. Yesterday's report on durable goods orders confirms that the manufacturing side of the US economy is white hot.
For the month, orders (blue in the graph below) were up 0.5%. "Core" capital goods (red) increased 0.9% to a new high:On a YoY basis, both were up over 10%:And it isn't just a case of comparing against a poor month last March. The full 12-month rolling average, whether measuring March through March, or February (in 2020, the month just before the pandemic hit) through February, total durable goods orders were also up over 10%, and the core measure was up over 12%. In other words, even if we include the "lockdown" months of spring 2020 in the current 12-month comparison, orders were still much higher than during the last year of the last expansion. This is of a piece with the extremely good ISM manufacturing reports for the past several months:As I wrote above, this helps tell us where industrial production (the King of Coincident Indicators) is likely to be in about 1 Quarter. Below are all three for the past nearly 30 years:
In other words, not only do we have a very strong production economy now, but it is likely to last at least through the summer.
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