Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
  New Orders for Durable Goods Declined 5.1% in December
Posted Under: Data Watch • Durable Goods

Implications: Durable goods ended the year on a sour note, with the largest monthly decline for 2015. However, the decline was led by aircraft orders, which are extremely volatile from month to month, as well as machinery orders, which next week's factory orders report is very likely to show was once again held down by the energy sector. In addition, companies continue to pare back inventories after overbuilding them earlier in 2015. But inventories are a volatile and temporary factor. A large rise in inventories provides a temporary boost in one quarter, but we pay it back in future quarters. Exactly like what we are seeing now. Don't fret too much about the soft headline on orders for durable goods in December. Although orders came in lower than almost anyone expected, this is a very volatile series and it's not unusual for it to decline five to six months a year. Expect further gains in the coming months as inventories stabilize and companies restock. Consumer purchasing power is growing with more jobs and higher incomes, while debt ratios remain very low, leaving room for an upswing in big-ticket spending. Meanwhile, profit margins are high, corporate balance sheets are loaded with cash, and capacity utilization is breaching long-term norms, leaving more room (and need) for business investment. In other news this morning, new claims for jobless benefits fell 16,000 last week to 278,000. Continuing claims rose 49,000 to 2.27 million. Plugging these figures into our models suggests nonfarm payrolls were up about 190,000 in January.

Click here for PDF version
Posted on Thursday, January 28, 2016 @ 10:48 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2021 All rights reserved.