GDP, Durable Goods

Wednesday, October 31, 2007 | 07:00 AM

Consensus for Q3 GDP is 3.2%; the consensus range was from 2.5% to 4.0%.

I am on the low end of the range, but given how an under-reported inflation number enhances GDP, a higher data point would not surprise me.

NT's Asha Bangalore  notes:

"Durable goods orders fell 1.7% in September, following a 5.3% drop in the prior month. The 38.7% drop in orders of durable defense items was the major cause for the drop in durable  goods orders.  Excluding defense, bookings of durable goods increased only 0.7%. Orders of  non-defense capital goods rose 4.4% in September after a 12.2% decline.   

The more troubling issue is the fact that both orders (-8.4%) and shipments (-1.1%) of durable goods are weak on a year-to-year basis."

A few of Asha's more interesting charts as we await GDP at 8:30 this morning:

Mfr_new_orders


Orders and shipments of non-defense capital goods excluding aircraft, the less volatile
component of durable goods, also send a similar message:

Cap_goods_exaircrft






Source:
Wilting Durable Goods Orders - Precursor of More to Come?
Asha Bangalore
Northern Trust, Global Economic Research October 25, 2007
http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/0710/document/dd102507.pdf

Wednesday, October 31, 2007 | 07:00 AM | Permalink | Comments (46) | TrackBack (0)
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Comments

GDP number will be on the low end to leave the Fed free for cuts today or later.

Posted by: Neal | Oct 31, 2007 7:51:59 AM

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