- by New Deal democrat
As with yesterday, the good news is that important official economic data is being reported again. The bad news is that it is very stale, as in covering last August.
Still, one important area that private data did not cover well during the shutdown was orders and spending on durable goods, both for manufacturers and consumers. So even if the data is stale, at least it gives us more information than we had before.
To wit, durable goods orders for August confirmed what we have been seeing in some of the manufacturing indexes, which is a slight rebound from this spring. Headline durable goods orders increased 2.9%, while total manufacturing orders increased 1.4%. Core capital goods orders (subtracting defense and aircraft) rose 0.4%:
Here is what the post-pandemic view looks like (normed to 100 as of February 2020):
And here is what the monthly change in new orders looks like (*4 for scale) compared with the more up-to-date regional Fed metrics from NY and Philly:
Finally, one marker of a recession is when sales go down, but inventories increase - because that means cutbacks in manufacturing and layoffs of employees. In August, shipments declined by a little over -0.1%, while the tiny increase in inventories rounded to unchanged:
Again, with the important caveat that this data is almost three months old, it suggests that manufacturing found its footing after this spring’s chaotic uncertainty about tariffs, and the national trend is likely to follow the slightly improving trend we have seen from the regional data during the shutdown.
