Monday, June 27, 2011

Durable Goods Orders Indicate Strength

The mixed picture for the economy continues. The latest indication is the strength in durable goods orders. Ed Yardeni points out:
There was lots of good news in May’s durable goods orders release. Especially important is that orders for nondefense capital goods excluding civilian aircraft orders (which tend to be volatile) rose to a new cyclical high. So did shipments of this stuff. The former jumped 14.4%, and the latter rose 9.1% based on the three-month change in the three-month average at an annual rate.

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Bottom line: The Federal Reserve continues to print money, but not at the rate it did in the 4th quarter of 2010. Thus, some propping up of the economy continues, but not at the level seen earlier.

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