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Capital Goods "Split Decision" Points To Uncertain Economy

Tyler Durden's picture




 

As expected, the January Durable Goods was a big miss to expectations, printing at -5.2% on an anticipated plunge in aircraft orders, worse than the expected -4.8%, and a plunge from the downward revised 4.3% in December. However, where there was a glimmer of hope, was the ex-transportation number, which rose modestly from 1.0% to 1.9%, on expectations of a 0.2% flat print. More curious, was the schizophrenic split in Capital Goods Nondefense ex aircraft, notably the Orders, which soared 6.3% on expectations of a 0.0% print, and up from a revised -0.3% in December, versus a drop in Shipments of -1.0%, down from 0.2% previously. As Bloomberg's Joe Brusueals called it, a "classic split decision" reflecting fiscal drag via reduced defense spending, modest gains in core economy.  Bloomberg economist Rich Yamarone added that the decline in shipments of nondefense capital goods ex-aircraft was "not a promising start" for 1Q business investment. We agree, as uncertainty in the US economy is back on the table and adding to European uncertainty.

One thing however is unmissable: on a year over year basis, both shipments and orders are rapidly rolling over.

Orders:

Shipments:

 

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Wed, 02/27/2013 - 10:10 | 3281462 Cult_of_Reason
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Obama's Secret Sequester Plan

...He knows the economy is tanking. He realizes that we are headed for a double-dip recession. He expects unemployment to soar. He understands that his almost $300 billion in tax increases this year will drive us into recession...

...Having raised payroll taxes by $200 billion; income taxes by $65 billion; health insurance premiums by 10-20 percent this year alone; and capital gains taxes by 9 percent; as well as having imposed a home sales tax of 4 percent, a package well north of $300 billion — Obama will blame sequester, amounting to $85 billion, for all the fallout his taxes will cause...

http://t.co/Ii3V2kgxNr

Wed, 02/27/2013 - 10:13 | 3281476 GetZeeGold
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So basically applying a bandaid to the wound will end up killing the patent.

Wed, 02/27/2013 - 10:14 | 3281481 Cdad
Cdad's picture

Oh man...killing the patient is sooooo bullish.  Imagine the healthcare savings?

Wed, 02/27/2013 - 10:15 | 3281485 Everybodys All ...
Everybodys All American's picture

King Obama will blame others no matter because that's how he rules.

Wed, 02/27/2013 - 10:20 | 3281498 Eireann go Brach
Eireann go Brach's picture

CNBC posted that futures are higher due to durable goods report! Turning shit into turds daily!

Wed, 02/27/2013 - 10:13 | 3281467 Cdad
Cdad's picture

And by "rolling over" you mean things are just great, right?  Like rolling over and going back to sleep on a Saturday morning?  

Wed, 02/27/2013 - 10:10 | 3281470 MFLTucson
MFLTucson's picture

Obamas recovery is doing real well!

Wed, 02/27/2013 - 10:17 | 3281490 DeadFred
DeadFred's picture

Cut the Kenyan guy some slack! There's only so much you can do between rounds of golf.

Wed, 02/27/2013 - 10:22 | 3281503 GetZeeGold
GetZeeGold's picture

 

 

He's golfing with Tiger Woods in an attempt focus his moral compass.

Wed, 02/27/2013 - 10:17 | 3281491 buzzsaw99
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Romney and Boner would have done so much better. [/sarc.]

Wed, 02/27/2013 - 10:24 | 3281507 ekm
ekm's picture

Did you guys know that the so called 'durable goods' require energy, electricity and crude oil to be used?

 

A friend of mine locked in his truck and is driving to work with with his wife's very small car. He can't afford the gasoline any longer

Wed, 02/27/2013 - 10:23 | 3281508 Oldwood
Oldwood's picture

Strictly as an observer, do we know that any of the numbers are accurately reflecting anything. While I'm but a piddling small business person of no consequence, I can say that I have never been asked by any source any questions that would lead to these statistics. How do we know that their sample sets are accurate or reflective of the economy? The fact that numbers are so divergent and irratic would lead me to believe they are meaningless. Or am I just too biased by my own circumstances to believe anything the does not cornform to my perspective?

Wed, 02/27/2013 - 10:43 | 3281549 NoWayJose
NoWayJose's picture

Nondefense Orders are hope that you can sell something to someone (anyone?) - Nondefense shipments are reality. A more interesting graph would be to compare the hope of orders to the reality of shipments over the past year. They should eventually match up if the numbers are not fudged for the algos.

Wed, 02/27/2013 - 10:48 | 3281564 China Reporter
China Reporter's picture

Guys! You all forget the horror of Boeing's Dreamliner that scares away its customers?

 

Well done Boeing. Keep that up, so American's job can be lost to its counterparts in China and Brazil. Then Ben can have more excuse to keep the QE unchanged.

Wed, 02/27/2013 - 11:30 | 3281747 Oldwood
Oldwood's picture

We are all waiting for the big KaBoom! but instead there is only the low hiss of oxygen leaking out of the room. I guess maybe suffocation is better than burning up in an explosion, but I always thought of myself going out in a flash or blast or something a little more spectacular.

Wed, 02/27/2013 - 11:43 | 3281791 BandGap
BandGap's picture

It would be interesting to see 2-3 more cycles leading up to today's discussion. From the limited data, it appears the frequency of the cycles is increasing. But you need more data.

 

Wed, 02/27/2013 - 13:10 | 3282190 csmith
csmith's picture

Rolling over?

Or already bouncing back ???

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