Monday, September 28, 2009

Trend Trackers Starting to Detect the Second Dip

Trend trackers who really dig through the data, but who operate blindly without a business cyle theory, are starting to catch on that the U.S. economy is likely headed for a double dip. They aren't all the way there, but they are starting to detect the problems. WSJ reports:

Consumer sentiment and new-home sales showed signs of improvement Friday, while sales of durable goods fell, signaling the U.S. economy's recovery won't be a smooth ride.

Optimism among U.S. consumers reached its highest level in September since January 2008, and new-home sales posted their fifth-straight month of improvements. But manufacturers' orders for durable goods -- big-ticket items designed to last three years or more -- tumbled 2.4% to a seasonally adjusted $164.44 billion in August, on a plunge in aircraft orders.

Together, "it's indicative of a patchy, slow recovery," said Joshua Shapiro, MFR Inc.'s chief economist. "In that type of environment, you're going to get some things that disappoint; you're going to get some things that are allright."...

On Thursday, a report showed that existing-home sales dropped 2.7% in August after four months of improvements.

"On the whole, this was a somewhat disappointing report, and when combined with the poor existing-home sales report yesterday, suggests that the recent positive momentum in the U.S. housing market may be slowing," TD Securities' Millan L.B. Mulraine wrote in a note to clients.

The new home sales, btw, over the summer were boosted by government programs that are now done, watch those number start to drop in particular.That'll really scare the trend trackers.


  1. Weren't existing home sales already down in August almost 3% YOY? So there's that.

  2. Oh, oops, I missed that sentence the first time I read the blockquote.