Thursday, November 3, 2011

Capex revised upwards (again)

September factory orders beat expectations (+0.3% vs. -0.2%), and along with that news came yet another upward revision to capital goods orders. This proxy for business investment has not only reached a new all-time high, it is up 9.5% in the past year and up at a 12.2% annualized rate in the past six months. The underlying fundamentals of the economy continue  to improve. If this keeps up, the problems in Europe sooner or later will fade in importance.


Benjamin Cole said...

OT but remarkable:

Nov. 4 (Bloomberg) -- Japan’s slide back toward deflation means bond investors are getting some of the highest returns among developed nations even with the world’s lowest yields.

Annual inflation slowed to zero in September, meaning investors in the nation’s benchmark 10-year securities receive the full 0.995 percent yield. That’s the highest so-called real yield for any Group of Seven nation except Italy’s 2.79 percent.

Benjamin Cole said...

The CAPEX going up undercuts the "business is scared of the Socialist Muslim Obama" line of reasoning.

Business is afraid of the lack of demand. Detroit wants more orders, not less. Farmers want to sell more, not less.

Wal-Mart wants more sales, not less.

Actually, I think big business comes out ahead in the deservedly maligned Obamacare. As costs for health care will be spread around, big businesses share of the total health care bill will decline.

People who pay the freight for health care will get a break. Non-payors forced to buy coverage will pay more, under Obamacare.

Curiously, Obamacare was a plan almost exactly like one once endorsed by the Heritage Foundation.

I still would like to know how Canada spends half on health care we spend, and gets roughly the same outcomes.

Benjamin Cole said...

"PRODUCTIVITY UP: Worker productivity rose in the July-September quarter by the most in a year and a half, the Labor Department said. At the same time, labor costs fell."

Labor costs fell? Now, how do you get runaway inflation, with labor cost falling?

William said...

Benjamin -

NO one on this Blog, including Scott Grannis, is writing about "run away inflation". You're having a debate with yourself.