Business investment remains strong

The 3-mo. moving average of capital goods orders (my preferred measure, since it removes some obvious seasonal distortions in the reported data) moved higher in November, the 18th consecutive month of gains that add up to a 17% annualized rate of growth—very impressive indeed. To be sure, growth has slowed of late (about 11% annualized over the past six months), but it still remains above average. It remains the case that these numbers reflect growing confidence on the part of businesses, and portend stronger economic growth in the months and years to come. Business investment is still less than it was a few years ago, but accumulated profits keep piling up, and that could drive many years of stronger capital spending.