Without the assistance of an extra day as in February, durable and capital goods orders and shipments returned to the usual contraction. As is typical for this part of the slowdown, these are not huge declines but merely the continuation of contraction now stretching into a second year. Durable goods orders (ex transportation) were in March 0.23% less than March 2015, which was already 1.08% below March 2014. The ‘stacking’ of contraction in capital goods has been more extreme, with new orders in March 2016 1.4% less than March 2015 and 5.1% less than March 2014.
It is the combination of contraction with enormous gaps of time (lost compounded growth) that is the biggest problem and concern. The effects of this latest part of the slowdown show both of these serious deficiencies; because of this contraction portion now lingering fourteen months, capital goods orders in March 2016 were also 4.5% less than March 2012. And because of that years-long slowdown, the current estimate is only 1.99% above March 2007, which is basically no growth despite nine years’ time.
This post was published at David Stockmans Contra Corner on April 26, 2016.
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