While the just released Durable Goods orders report for October came in modestly better than expected (which many thought would be a decline due to Hurricane Sandy), the primary driver of this continues to be record durable good inventory accumulation. Excluding the noise, and focusing only on real, non-noisy economic strength metrics such as New Capital Goods Orders (technically defined as the year over year change in Non-Defense Capital Goods Excluding Aircraft), a very different and far uglier picture emerges. In fact, the October Y/Y Plunge of -8.1% in this major indicator was the biggest drop since 2009.
Curious where this collapse in New Orders is in the context of prior recessions? Here it is (shaded areas indicate NBER-defined recessions). We have never had such a steep drop in Cap Goods in the past 30 years without a concurrent recession.
To summarize: according to one of the least susceptible to manipulation indicators of US economic strength and growth, the US economy is now in a recession.
Source: St. Louis Fed