GAINS…WHAT GAINS? New Gov’t Data Shows Much Lower Than Expected Economic Ga

A major indicator for long term investing for businesses and consumers is new purchase orders for manufactured durable goods in the United States, which has just seen a large downward revision following January numbers as well as data on employment.

In February, orders for manufactured durable goods increased slightly to $277.9 billion or 1.4% but according to the U.S. Census Bureau, the actual numbers in January were -6.9% instead of the estimated -6.1% which cuts into the reported gains.  The trend is to report high growth figures which are then reported lower in the following months.  The same trend can be seen on employment figures where employment fell short of estimates for January and February.

In order to keep up with inflation, which has risen 13.5% since President Biden was sworn into office in 2021, the manufactured durable goods orders would have to outpace the inflation rate and more to actually grow, but has failed to do so for years. Inflation still remains high, rising to 3.2% in February which is higher than the target of 2% inflation goal set by the Federal Reserve.

The Census Bureau reports a volatile market for orders of durable goods with 0.3% declines in December, 5.4% growth in November, and a decline in October of 5.1%.

In 2o23, The Bureau of Labor Statistics in 2023 greatly overestimated just how many jobs were being added to the economy, averaging an overstatement of 105,000 jobs each month or 1.3 million jobs less than estimates. These revisions to the numbers often go underreported, but the data shows months of positive gains in both durable goods and jobs being wiped out by losses after the dust settled.