Core Durable Goods

There’s nothing ambiguous about this – core durable goods growth is strong:

Cdcficjc

The average year-over-year %-growth is 3.75%.  The present rate is 6.53%.

There are 18 instances since 1993 that growth has been between 5 and 7%.

In only 3 occasions (16.7%) were there negative equity returns 1-year forward: July 1993, March 2000 and May 2000 for a mean of -8.03%.

The balance of instances (83%) saw 1-year forward returns average +14.47%.

If this series closes in on flat year-over-year, it will probably be time to get worried.  Presently, however, the odds and implications appear favourable.

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One Response to Core Durable Goods

  1. jeff sciscilo says:

    Matt, the yoy in core capex is now slightly negative (through June). Are you starting to get a bit concerned or are there other positive forces at work that may be able to neutralize this? I haven’t run the numbers, but it doesn’t appear that the 1yr forward market performance has been too promising in past instances and in fact maybe implies a pretty serious correction lies ahead?http://research.stlouisfed.org/fredgraph.png?g=9y0

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