- by New Deal democrat
There was more evidence yesterday that, far from sliding into recession, this year we came our of last autumn’s “mini-recession” and are in an inflationary expansion now.
Both metrics have to do with durable goods. In general, durable goods are the second items to turn down or up after housing. They can be noisy on a month to month basis, but at present that’s not an issue.
In July, durable goods orders by manufacturers rose 1.1%, and core capital goods orders rose 0.2%. Both have been in a clear rising trend since the middle of 2024:
Much of this is likely related to AI data center building, so I question its durability; but for now the trend is clear.
Secondly, motor vehicle sales for July were reported by the BEA. Here there was a slight decline in light vehicle sales, down -1.4% for the month, and a sharper one in heavy truck sales, down -9.5%. But as the below graph shows, the trend since late last year is sharply higher for trucks, and moderately higher for light weight passenger vehicles:
In fact, on a YoY basis (not shown), sales of heavy weight trucks are higher by 3.6%.
The historical graph below shows why I pay particular attention to heavy weight truck sales:
They are much less noisy than passenger vehicle sales, and tend to turn down earlier, and higher later, than passenger vehicles. Note that there has *never* been a time when heavy weight trucks sales have turned higher YoY when a recession has closely followed. Rather, they tend to confirm that an expansion is underway.
