While The World Waits

The Lehmann Letter (SM)

While the world waits for news from Europe, the American economy proceeds in low gear.

This morning the Census Bureau released reports on September capital-goods expenditures and new home sales.

New orders for nondefense capital goods (nonmilitary machinery and equipment) held steady at $76.0 billion:

http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf

Place this number on the chart and you'll see that new orders for capital goods have snapped back sharply from their recession lows. But they have not yet returned to the peak levels they enjoyed before the recession.

Nondefense Capital Goods

(Click on chart to enlarge)



(Recessions shaded)

New home sales are in far worse shape. The chart reveals that they continue to scrape along the bottom. September's 313,000 confirms the trend:

http://www.census.gov/const/newressales.pdf

New Home Sales

(Click on chart to enlarge)



(Recessions shaded)

Today's data do not offer any kind of breakthrough. Neither business capital expenditures nor household purchases of new homes are strong enough to significantly boost the economy or substantially reduce unemployment.

(To be fully informed visit http://www.beyourowneconomist.com/)

© 2011 Michael B. Lehmann