The 2014 Economy Lingers On Under The Hope For Something Different
For the month of July 2014, total durable goods orders exploded higher in a fit of Boeing. The growth in aircraft orders in percentage terms was so large as to be meaningless. On a seasonally-adjusted basis, total durable goods (using the latest benchmarks) went from $236.3 billion that June to $290.8 billion for July. Coming as it did in the middle of 2014 when it had seemed as if everything was on the up, it was just more embarrassment of riches for the US as the ‘cleanest dirty shirt’ just about to be put into the washer.
Of course, the surge in transportation orders heralded nothing for the actual economy, as by the time those estimates were published (and originally the overall estimate for that month was nearly $300 billion) at the end of August 2014 the economic direction had already taken the opposite route. It was just another in a long line of positive numbers, and truly a big one, that have been consistently taken for recovery. An actual growth period, by contrast, is not one with an occasional big number, but one where those become the norm and therefore small positives are the aberration to be set aside.
We are seeing something of a repeat if in miniature with durable goods for October 2016. The seasonally-adjusted estimate for September was $228.4 billion, jumping to $239.4 billion in the latest update. Civilian aircraft orders, notoriously volatile, were up almost 140% while military aircraft orders grew by a third. Commentary has been, as you would expect, extremely positive.
This post was published at Zero Hedge on Nov 25, 2016.