Surveying the financial and economic landscape looks increasingly like an exercise in watching the perfect storm unfold. Today’s sour updates on durable goods orders, new home sales weekly jobless claims only strengthen the sentiment.
Durable goods first: they’re down. Big time. The government reports that seasonally adjusted new orders for durable goods slumped 4.5% in August, the biggest percentage drop since January. As the chart below reminds, the trend looks equally troubling in actual dollar value as well.
It doesn’t help that on a rolling 12-month basis, new orders for durable goods have fallen for six months running. Ditto for the fact that the back-to-back losses of nearly 5% in July and August for the 12-month change in new orders is the deepest loss for two consecutive months in six years. Let’s not mince words: the trend is definitely not our friend here.