Durable Goods Rise 2%

It’s hard to provide meaningful updates in this market. Everything is moving so quickly as we saw in the final hour of yesterday.

The market is up again this morning. But the rally seems more cautious and we’ve already slipped back a bit.

So far, the financial rout seems unrelated to the economy. This morning, in fact, we got news that durable goods rose 2% last month. That comes after a 4.1% increase in June.

Orders in a category that serves as a proxy for business investment expanded 2.2 percent in July following a 1.4 percent rise in June. These orders had fallen in four of the previous five months, reflecting the soft patch that manufacturing has faced this year.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, called the 2.2 percent gain in the business investment category “really good news.” He said the strong gain was a solid indication that the big cutbacks in investment spending by oil companies were starting to taper off.

While the July increase is encouraging, U.S. manufacturers still face a host of problems from a stronger dollar to falling oil prices and turbulence in China, the world’s second biggest economy.

The higher value of the dollar against foreign currencies makes U.S. goods more expensive and less competitive in major export markets. The lower oil prices have led energy companies to scale back their investment plans.

Posted by on August 26th, 2015 at 10:54 am


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