Wednesday, April 27, 2011

Capital goods orders take a breather

New orders for capital goods rose by a strong 3.7% in March, and February orders were revised upwards by 2% (upward revisions of past data have become quite common in this series over the past year), but that wasn't enough to offset the big decline in January orders. Thus the annualized growth rate of this series over the past 6 months has slipped to 4.8%, down from the heady 20+% pace of last year's third quarter. The 3-mo. moving average (shown here) also reflects this slowdown. Still, capex orders have surged 25% in the past two years, and that is pretty impressive by any standard. Whether the recent slowdown/slump is anything more than payback for the unprecedented growth spurt of last year remains to be seen, but that would be my guess at this point.

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