Wednesday, March 25, 2009

More Glimmers

The Lehmann Letter ®

Today the Census Bureau released two more glimmers of hope that buttressed recent upbeat data on housing starts and existing-home sales.

New orders for nondefense capital goods (i.e. business machinery and equipment, including transportation equipment) improved in February: .

Business ordered $52.7 billion in February, an improvement on January’s $49.2 billion. If you update the following chart with these figures, however, you can see how far the numbers have fallen. Moreover, February’s reading remains below December’s $54.0 billion pace.

Does the recent uptick signal a turnaround? You can see from the chart that there’s a lot of noise in the data. So it’s too soon to know.

Nondefense Capital Goods

(Click on chart to enlarge)

Recessions shaded

Census also said that new-home sales – at 337,000 - were up in February from January’s 322,000 pace: But, once again, that’s less than December’s 371,000 rate. And the chart below reveal that all these numbers are record lows.

New Home Sales

(Click on chart to enlarge)

Recessions shaded

It’s good to know that all of this month’s major housing releases – new and existing-home sales and housing starts – were up. And we can take some cheer from the machinery and equipment uptick. But it really is too soon to tell whether or not we’ve hit bottom, not to mention that we’re heading back up.

(The charts were taken from [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2009 Michael B. Lehmann

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