Durable goods orders increased in March by 3.2%, which sounds great, except that it was primarily transportation orders (Boeing). Core durable goods excluding transportation and defense declined -0.4%:

(Click on image to enlarge)

While both core and total durable goods orders are down from their peaks last year, joining the recent decline in residential construction among the leading sectors, neither are off nearly as much as their 10%+ declines in 2015-16 that at the time I labeled the “shallow industrial recession,” or their declines before the 2001 recession:

(Click on image to enlarge)

By contrast, the 2008-09 recession started off as a consumer-led downturn, where durable goods orders gave no advance warning.

This is important, because as the US in the past 40 years offshored most of its base manufacturing, that sector has had increasingly less impact on an economy that is now 70% consumer-driven.

The best foretaste of consumption is real retail sales. But the broadest measure is real private consumption expenditures, particularly for services, which will be reported in two days. I intend to post a heads-up on what to look for in that report later today.

More By This Author: