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The Surge in Durable Good Orders: Read About it Only in USA Today
That's because it is not true. USA Today headlined an article on reports on the latest weekly jobless claims and April durable goods orders: "Initial jobless claims drop; durable goods orders surge."
While the Commerce Department did report a 1.9 percent increase in April orders, it revised down the March data by 1.3 percentage points (as noted in the article) to show a 2.1 percent decrease for the month. This left the April orders number 0.6 percentage points above the originally reported March level, almost exactly the same as the consensus forecast.
The new orders index excluding the volatile transportation category rose by 0.8 percent in April, considerably less than the 2.1 percentage point downward revision to the March data, leaving the April number 1.3 percentage points below the level previously reported for March, somewhat worse than the consensus forecast.
New orders for non-defense capital goods, a measure of new investment, fell by 2.0 percent in April. Excluding transportation equipment the drop was 1.5 percent. These April numbers are, respectively 35.6 percent and 27.4 percent below their year ago levels.
--Dean Baker
COMMENTS (2)
Huh?
Please recheck your article. Months are wrong. [thanks DB]
Posted by: uptown | May 28, 2009 1:13 PM
Ummm, I know this is simple math, _and_ I'm only looking at the weekly economic calendar on Yahoo! (http://biz.yahoo.com/c/e.html) but I'm not following this. :(
You say "While the Commerce Department did report a 1.9 percent increase in April orders, ...". So far so good. The "Actual" number for April is reported as 1.9% on Yahoo!. Also, you say "... it revised down the March data by 1.3 percentage points [...] to show a 2.1 percent decrease for the month." This seems right too since the "Prior" number is -2.1% which was "Revised From" -0.8%. A difference of -1.3%. But then you say "This left the April orders number 0.6 percentage points above the originally reported March level ..." and here I get lost. According to Yahoo! the "originally reported" number for March was -0.8%. The difference between 1.9% (the April orders number) and -0.8% (the original March number) is 1.9% - (-0.8%) = 2.7% not 0.6%. Did you instead mean that if we correct the April number by the same amount (-1.3%) then we get a projected revised April number of 0.6%? That math works out (1.9% - 1.3% = 0.6%) but it seems like that's something different than what you said. Or am I missing something?
Cheers
Dr. Dent
Posted by: Dr. Dent | May 28, 2009 4:43 PM