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  How Can Transportation Orders Go Up When Autos and Aircraft Were Both Down?
Posted Under: Durable Goods
In today's advanced report on durable goods orders an interesting thing happened.  Transportation equipment led the gain in overall orders, rising 2.3%, but when looking at the major subcategories for transportation equipment, both autos and aircraft orders were down. So how could we have seen such a large increase in transportation?

Although it is not shown on the advanced durables report, the transportation sector is broken down into 14 categories, link here (pages 14 and 15). Some of these categories only have a few companies that report to the Census and so, for privacy sake, this information is kept confidential. Otherwise, analysts would be able to use government data to figure out how particular companies are performing, which would make it tough for the government to collect the data in the first place.   

This is not the first time that overall transportation equipment and autos and aircraft orders have diverged. Going back to 1992, we have seen this happen in 29 other months. So although it does not happen frequently, it does happen and will happen again. Don't get caught up in conspiracies that the government is manipulating statistics. The real story is that the underlying strength of the economy is continuing to improve, companies are doing better than they ever have, and the market still looks to be undervalued.

Addendum: The Wall Street Journal addressed this issue this afternoon and after digging through it's news stories archive found a $16.8 billion submarine order from the Pentagon in late April.  This order seems to fit the missing transportation amount almost perfectly.

Posted on Tuesday, May 27, 2014 @ 2:17 PM • Post Link Share: 
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