Weak Durable Orders Suggest Problems Brewing for U.S. GDP
In my previous article, I talked about the U.S. economy and how it will likely stall this year. The second estimate for the second-quarter real gross domestic product (GDP) growth comes out tomorrow, and I’m not that optimistic. In fact, I’m becoming more pessimistic towards GDP growth going forward.
If you don’t agree, then just take a look at the durable goods orders for July, which showed a horrible decline of 7.3% in that month alone, based on information from the U.S. Census Bureau. The reading was much worse than the 4.5% contraction expected by Briefing.com and the 3.9% advance in June. Even when you strip out the volatile transportation element, orders fell 0.6% versus an expected gain of 0.4% and the 0.1% advance in June. This doesn’t bode well for GDP growth.
A closer look showed shipments of durable goods declined for the third time in the past four months and unfilled orders have risen in five of the past six months. Again, this doesn’t support GDP growth.
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