It is in the numbers...
"Durable goods orders decrease"
"by Bloomberg News | March 27, 2008
WASHINGTON - Orders for US durable goods unexpectedly fell in February, led by a slump in demand for machinery, as the housing downturn and the prospect of a recession made companies hesitant to invest.
The 1.7 percent drop in demand for products made to last at least three years followed a 4.7 percent decrease in the prior month, the Commerce Department said yesterday. The department also reported sales of new homes dropped 1.8 percent last month to a 13-year low.
Businesses are cutting equipment purchases as the biggest housing decline in a quarter century hurts sales, and rising fuel costs erode profit. Only exports are preventing manufacturing from declining even more. Economists at Morgan Stanley now predict the economy will shrink at an annual rate of 0.7 percent in the first quarter, from a previous forecast for a 0.4 percent contraction.
"We're right in the teeth of the recession," said John Silvia, chief economist at Wachovia Corp. in Charlotte. "The recession's going to be characterized as the first half of 2008, and waiting for recovery in the second half."
Did he say "we're right in the teeth of the recession?"
Oh, you better go talk to Bush!!
Oh no we isn't!!!!
"Businesses definitely have shown they are beginning to retrench," said Aaron Smith, senior economist at Moody's Economy.com in West Chester, Pa. "Demand is weakening and investment intentions are showing a bit of fatigue."
Economists projected orders would rise 0.7 percent, according to the median of 69 forecasts in a Bloomberg News survey, after a previously reported 5.3 percent slump in January. Excluding orders for transportation equipment, which tend to be volatile, bookings fell 2.6 percent, the most since January 2007.
The slump in orders was paced by a 13 percent decline in demand for machinery that was the biggest since comparable records began in 1992.
Bookings for nondefense capital goods excluding aircraft, a proxy for future business investment, fell 2.6 percent, the most since October. Shipments of those items, used in calculating gross domestic product, dropped 2.1 percent, the most since January 2007.
Orders excluding defense equipment decreased 1.6 percent and bookings for military gear dropped 10 percent.
Be sure you Sig Heil, 'murkn!
New home sales fell to a 590,000 annual pace, the lowest level since February 1995. Purchases were down 30 percent from February 2007.
Economists had forecast new-home sales would decline to an annual pace of 578,000, according to the median of 71 forecasts in a Bloomberg News survey. Estimates ranged from 560,000 to 600,000. Purchases in January were revised up to 601,000 from a previously estimated 588,000 pace.
Purchases declined in two of four regions, led by a 40 percent plunge in the Northeast, the biggest drop since 1996.
The report did contain one bit of positive news. The number of new homes for sale at the end of February dropped to 471,000, the fewest since July 2005, indicating builders are making headway in clearing out the inventory glut.
Still, the decline in sales kept supply at 9.8 months, the same as in January and the highest since 1981.
Elevated inventories are pushing down prices. The median price fell 2.7 percent from February 2007 to $244,100."My reading of the economy?
Pfffffffffttttt!
Sig Heil!!!
