Another 0.0% for the administration

don't expect them to go on TV and tout this one though

This morning the durable goods orders data came in at 0.0% for the month of July. That’s right, the same little trick that the administration tried to play with the inflation numbers can now be played with orders for durable goods.

On a year-over-year basis, orders for durable goods are still quite elevated at 10.8%. When we zoom out and look at the dollar figures, we get a better picture of what is going on.

Earlier this year, I had the opportunity to speak with a former Fed economist. When I quizzed her about the inverted yield curve she said that it was “not as effective, historically accurate, or reliable as watching durable goods”. Her belief was that durable goods was a better recession indicator. This idea stuck with me because I thought it might be something the Fed might key on.

We can see from the chart above that we’ve been on a rapid rise in durable goods in dollar terms since the lock-downs. It looks like the covid relief money had a big and lasting impact.

As a reminder, durable goods are goods that last longer than a year (usually 3 years). Examples would be home appliances, cars, furniture, tools, sports equipment, medical equipment, and consumer electronics (like and iPhone or tablet).