Heh, Where's My Durables? New orders for manufactured durable goods in June decreased $2.0 billion or 1.0 percent to $190.5 billion, the U.S. Census Bureau announced today. This was the second consecutive monthly decrease and followed a 0.8 percent May decrease. Excluding transportation, new orders decreased 0.6 percent. Excluding defense, new orders decreased 0.7 percent.
Well, pick your "excludings" here, it all sucked.
Let's look inside.
Machinery orders, down. Shipments up - oops, that would be backlog coming off. Not good.
Computers and electronics has an interesting divergence. The baseline is down 4.1% on shipments and 1.9% on orders. But both subclasses showed increases in new orders. Huh? Hmmmmm.... so we have a bit of uptick in communications gear and computers, but all other electronics are down more than enough to compensate? Looks that way. The subclasses are about 1/3rd of the total, so this implies strongly that consumer electronics are in the crapper.
This wasn't caught by any of the pump monkey commentators this morning. Why did I catch it? Because the electronic sub-categories are the ones I watch very carefully for signs of economic activity in the hiring space, and the implication here is for a modest improvement in that regard.
But if the consumer is in the crapper, it won't matter for long, and worse, it tells me that employers are probably responding to a false demand signal. That, incidentally, aligns with the ECRI leading indicators expectation....
Green sharts!
