Wednesday, March 28, 2007

Big Inventory Build Out There ....

After yesterday's durable goods report, I looked at overall business inventories from the St. Louis Fed. There's a lot of stuff in the system.

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This inventory build may be one reason durable goods orders have dropped 4 of the last 5 months (from the WSJ)

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"It's looking like capital expenditures aren't going to be able to offset housing and autos with respect to investment," says Joseph Brusuelas, chief U.S. economist for IDEAglobal, an economic-consulting firm in New York.

Economists monitor new orders for nondefense capital goods excluding aircraft because it gives a clearer picture of how businesses view future economic conditions. In addition to reporting a decline for February, the government also revised January's number to a decline of 7.4% from last month's estimate of a 6.0% decline.

Food for thought...