This is another case where it makes sense to look inside the numbers.
Orders to U.S. factories for big-ticket manufactured goods fell for a second consecutive month in August, marking the first back-to-back declines in more than two years.
There are some key issues this article does not address.
This could be troubling, or maybe not.
The Commerce Department reported Wednesday that demand for durable goods dropped 0.5 percent last month to $209.7 billion. The $1 billion drop from July, when orders had fallen an even bigger 2.7 percent, reflected a plunge in demand for computers and other electronic products.
Let's see. We were paying $3 a gallon for gas, maybe holding off on that new computer or washer would be a good idea.
The August performance was worse than had been expected and was certain to raise concerns about whether weakness in manufacturing could contribute to a bigger slowdown in overall economic growth.
What I'll be interested to see is if the drop in fuel prices relieves some of the pressure on consumers.
Orders for durable goods, items expected to last at least three years, have been one of the strongest sectors of the economy in recent years as factories rebounded from the 2001 recession.
For August, demand for computers and electronic products dropped by 4.7 percent or $1.5 billion.
High fuel prices and back-to-school shopping could have had an effect as well.
Orders for non-defense capital goods, considered a good indication of company plans to expand and modernize, fell by 3.5 percent last month after a 0.6 percent decline in July.
Businesses responding to cautious consumers?
The overall economy roared ahead at a 5.6 percent pace in the first three months of the year but then slowed to a 2.9 percent rate of growth in the spring.
Will anyone be surprised if the numbers for the summer months are slow as well? This could be much ado about nothing.
Maybe.
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