- by New Deal democrat
With another likely government shutdown looming at the end of this week due to DHS funding, we are still playing catch-up from the last one that ended in November. This morning’s edition of stale data was durable goods manufacturing for November.
One of the stories of the latter part of last year is that manufacturers appear to have adjusted to the increased tariff regimen imposed by Washington. That was apparent in this morning’s data, as new orders for durable goods (blue in the graph linked to below) increased a strong 5.3% in the months, while core capital goods orders (red), which convey more signal and less noise, increased 0.7%:
This is in stark contrast to new orders for consumer goods (gold), which, while they have not been decreasing, completely stalled over the past 2 years.
Note that this is in contrasst to the ISM manufacturing index, which has been in contraction since February of last year:
Since the ISM metric is a diffusion index, meaning that the number of respondents reporting contraction have outnumbered those reporting expansion, this suggests that the increase in new orders for manufacturing is concentrated in relatively few industries. The biggest driver, per the report, appears to have been transportation equipment, although we know that the trucking industry is suffering greatly. Beyond that there is little information, but my suspicion is that we are seeing a byproduct of the big build-up in AI-related data processing centers.
