Core Capital Goods Orders are Retreating.

[Beet]

I'm surprised Carl hasn't jumped on this, as it's significantly more important than a 4,000 jump in unemployment insurance. Today's capital goods report is illustrative of how statistics can be interpreted. Headline, durable goods orders rose 4.2%, followed by a 1.6% increase last month. Stripping out defense orders, capital goods rose 5.7%. However, this was driven by a 54% increase in commercial aircraft orders, which are considered highly volatile. The headline numbers mask a decrease in nondefense, nontransportation capital goods, what economists consider "core capital goods." This decreased 3.4%, followed by a downwardly revised 2.7% last month. So the underlying trend in capital goods is down by 6% in the last two months. While they are still up about 7.5% this year, that increase was during the first half of the year. This cannot be good.

Yesterday, Fed Board member from St. Louis Bullard said that the minutes from the most recent Fed meeting where several members urged stimulus were 'stale', suggesting that more positive numbers have come out then. Perhaps today's report will cause Bullard to reevaluate if it really was 'stale.' For one thing, the capital goods report matches neatly with the Fed's own Empire State and Philly indexes, which are at the worst levels since 2009. I don't think anybody is satisfied with the rate of job growth or unemployment growth. Yes, consumer spending increased 0.8% in the latest report, but that was only after declines in the previous months.

The Fed is concerned about launching another round of QE in September for fear of looking political. The problem is that the objective case for QE is strong-- the economy is going too slowly while core price inflation is low and falling. And though he was reappointed by Obama, Bernanke is a Republican, so he can hardly be accused of attempting to help Democrats. Also, now that Romney has come out against QE, by not doing QE when the case for it is strong, Bernanke looks partisan in favor of Romney. The Fed should really focus on doing its job and not try to play both sides because they can't win that game regardless.

[Beet]

The Empire State Manufacturing Index report fell further, to -10 from about -6. This comes as a bit of a surprise as European credit indicators have been improving since about July, as well as US financial indicators, so one would have expected a stabilizing of NY area manufacturing. It's also bad news for Obama because the Empire State Index may foreshadow the national ISM manufacturing report, and manufacturing employment is a component of the September jobs report. Manufacturing had been a bright spot in the jobs picture until the latest report. I'm still confident that manufacturing will revive by the end of the year, provided there are no big news events from now until then.

[Beet]

I'm extremely anxious about tomorrow's ISM report. The last few reports were a shade under 50, when the Chicago business barometer was around 53-54. Friday, the Chicago business barometer printed below 50 for the first time in three years.

What's going on here is a synchronized manufacturing slowdown around the world -- Chinese manufacturing has been shrinking for 11 straight months now -- and American manufacturing is certainly not immune. The ISM manufacturing could easily come in with a negative shock -- a print in the low-to-mid 40s is what worries me.

Of course, it being this close to the US Presidential election, it can't be helped but that politics is discussed. We've had some 30-odd months straight of good-to-decent manufacturing figures. But if Americans feel the economy is stalling out in the next five or six weeks, it could give an unexpected boost to Romney.

[Beet]

This was better than I'd dared hope, which says something about the state of global manufacturing at the moment. The resilience of American manufacturing is just remarkable -- every other manufacturing index from just about every other country is negative right now.

[Politico]

This was better than I'd dared hope, which says something about the state of global manufacturing at the moment. The resilience of American manufacturing is just remarkable -- every other manufacturing index from just about every other country is negative right now.

Despite all of the malaise, we're still the best in the world, and we're going to roar with Romney.

[opebo]

The resilience of American manufacturing is just remarkable

Well, to be fair, that 'resilience' is based on abysmal worker protections, pay, pension, etc. - all categories of well being are on the decline as required by neo-liberal globalization.  So, be careful what you celebrate: the success of a sweat-shop is nothing to write home about.

[True Federalist (진정한 연방 주의자)]

This was better than I'd dared hope, which says something about the state of global manufacturing at the moment. The resilience of American manufacturing is just remarkable -- every other manufacturing index from just about every other country is negative right now.

Despite all of the malaise, we're still the best in the world, and we're going to roar with Romney.

This is America, not Grand Fenwick.