Monday, March 28, 2011

Are Durable Goods Orders Showing an Upcoming Slowdown?

This chart is bothering me. Notice that a large number of data points in the last year are concentrated in the 192,000-196,000 area. There have been some strong moves above that area, but only three times. Now let's look at a longer time series.

On the longer scale, notice that durable goods orders are still far below their peaks from the end of the last expansion. In addition, note their rate of ascent appears to have stalled, which is revealed in more detail on the following chart:

Above is a chart of durable goods orders on a scale of 100. Notice that orders have stalled in the 75-80 range for the last 10 months -- which is below previous levels.

Durable goods orders are a very volatile series. However, their current lack of movement is beginning to concern me regarding the big picture.