U.S. durable goods orders drop

[jayfish]

http://www.msnbc.com/news/971635.asp?0cm=c20

-SNIP-
ORDERS FOR DURABLE goods, items intended to last three years or more, decreased 0.9 percent in August, the Commerce Department said. It was the first decline since April and bucked expectations on Wall Street for a 0.6 percent rise.
-SNIP-

How's that recovery coming along?

Jay

[kcwayne]

1. Of course they dropped

Why in the world would Wall Street expect durable goods order to rise?

Who wants to make a capital expenditure when you are either:

1) Layed off

2) Know for sure you are going to get layed off

3) Think that all the empty space in your building is a leading indicator that you are going to get layed off.

4) Think that seeing headlines everyday about more layoffs is a concern that you might get layed off

5)Think that since business is so bad, you won't get a bonus or raise for the next 5 years.

6) Know that you are not going to benefit from the Bush Tax cuts.


I guess capital expenditures could go up if the 2.5 million of the 250 million people in this country for whom none of the above conditions apply all decide to go out and spend money on furniture and machine tools. Oh, but wait. If they do buy, they will buy Chinese furniture and machines tools.

[scisyhp]

2. Excluding Defense

the drop is even more impressive -2.6%. An extra $87B should take
care of that though.