U.S. Outlook: What does the drop in new orders mean?

Scott Anderson
Posted by Scott Anderson
Chief Economist

You know the saying, “Get used to disappointment”? That’s what happened to economists’ expectations for durable goods orders for February.

Chart showing recent rise in inventory shipment ratios.For more on what this means and other economic developments this week, see my full analysis. Highlights are outlined below, followed by a link to the full U.S. Outlook report, delivered on March 27.

Key observations:
  • The sixth consecutive monthly drop in non-defense capital goods orders helps explain the FOMC’s caution about raising interest rates over the near term.
  • The rapid strengthening of the U.S. dollar is one factor driving the downturn in non-defense capital goods orders.
  • Inventory shipment ratios have been on the rise and are now out of whack with current demand.
  • The U.S. economy has gotten off to another shaky start, much as it did in Q1 of last year.

Click here to read my full report.

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