(Greenwich, 9/27/2006) New orders for manufactured durable goods in August 2006 decreased 0.5%, to $209.7 billion the second consecutive monthly decrease and followed a 2.7% decrease in July. Orders were up 8.5% over year earlier figures. You can see the report by clicking here, then clicking the red Advance Report on Durable goods title.
Manufactured durable shipments increased 1.9%, to $214.2 billion, its highest level since 1992 and 7.6% above a year earlier. Capital goods shipments rose 1.4% in August, 11% higher than a year ago.
Unfilled orders increased $2.4 billion, or 0.4%, to $631.9 billion, up fifteen of the last sixteen months. This is the highest level since the series began. Inventories rose 0.2%, to $287.1 billion.
Communications equipment was a bright spot, with orders up 7.0% in August (+13.8% year over year) and shipments up 4.7% in August (+5.8% year over year.)
Motor vehicles and parts orders continued their see-saw, up big for the onth after a terrible July but only 0.5% for the year. Shipments for the year were 0.0%.
Taken as a whole the report gives a soft picture of growth, which will help keep interest rates down and support firming multiples in the stock market.
JR
My understanding of your market position is that the economy will see moderate growth because of the decline in housing; you see good news for stocks because low interest rates increase the discounted value of stock earnings; you see strong corporate earning; you see value in Asian markets. I kind of understand your point that inflation of assets is near zero. Does this mean that if the GNP declines to 1.5% that the long bond might trade at 3.5% or so? My portfolio is currently a little weird. I own technology and consumer cyclical stocks balanced with long bonds. The strategy is working. I bought the bonds on margin in May and July so I need 6 months to reach long term gains. Dare I try to hold?