Thursday, October 2, 2014

The Bouncing of Consumer Durable Goods

The following chart shows the 6 month moving average of the real monthly value for manufacturers' new orders for consumer durable goods industries per capita (August 2014 dollars). I have added two parabolic trend lines for your consideration.

Click to enlarge.

Let's zoom in for a closer look at the current recovery.

Click to enlarge.

As seen in the chart, it's gone nowhere over the past year (and the trend line reflects that stagnant velocity).

The optimists believe that the economy will soon accelerate. I would argue that the economy has been accelerating since the bottom of the recession (much like gravity would accelerate, to the downside).

In my opinion, those expecting great things from here have clearly never played with a "deflated" basketball. It takes a lot of work to make it bounce high.

Source Data:
St. Louis Fed: Custom Chart

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