THE BASIS POINT

We are Having a Manufacturing Recession.

 

Durable Goods Orders (December 2015)

– New Orders month/month -5.1%. Previous was -0.5%
– New Orders year/year  -0.6%. Previous was +0.6%
– Ex-transportation month/month -1.2%. Previous was -0.5%
– Ex-transportation year/year   -3.2%. Previous was -2.3%
– Core capital goods month/month -4.3%. Previous was -1.1%
– Core capital goods year/year   -7.5%. Previous was -2.5%

What we have here is a manufacturing recession.  Slowing economies and a stronger US dollar in the rest of the world lowered the demand for Durable Exports.

The notion that this is no problem because the U.S. is essentially a service economy misses the fact that manufacturing produces more profits than servicing.

 
Initial Jobless Claims (week ended 1/23/2016)

– Initial Claims seasonally adjusted 278,000. Previous was 294,000
– Initial Claims unadjusted, totaled 296,817 a decrease of 81,930 from previous
– 4-week Moving Average 283,000. Previous was 282,250

 
Pending Home Sales Index (December 2015)

– Pending Home Sales Index 106.8. Previous was 106.7

Month/month comparisons are complicated by the holidays and TRID. I don’t know that there is any usable information here.

 
Kansas City Federal Reserve Manufacturing Index (January 2016)

– Level -9.  Previous was -9.

To repeat:  manufacturing is in recession.

 

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