Economy

Economic Data Roundup (02/27/2018)

2/27/18 12:00 PM

iStock-500455316-1.jpgThere were two important reports on the U.S. economy released this morning. First, orders for U.S.-manufactured durable goods (items meant to last at least three years) fell in January by $9.2 billion (3.7 percent) to $239.7 billion, according to a new report from the Census Bureau. That was much worse than expected and the December gain was revised lower. Most of the weakness was due to a 28.4 percent drop in bookings for commercial aircraft, but even core durable goods orders, which exclude the volatile transportation component, fell by 0.3 percent. Orders for nondefense capital goods excluding aircraft, i.e. core capital expenditures, an important proxy for U.S. business investment, also declined by 0.2 percent last month. That was much worse than the forecast 0.5 percent gain and perhaps a sign that demand is starting to cool after several quarter of above-trend growth. However, many economists remain optimistic that capital investment will strengthen in 2018 because of the recently passed tax legislation.

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Elsewhere, the consumer confidence index from The Conference Board jumped to 130.8 in February, a much larger increase that expected and the best headline reading since November 2000. Surveyed Americans’ opinions of both current and future economic conditions improved this month, with confidence in the labor market being a main driver of the brighter outlooks. Moreover, 39.4 percent of respondents said that jobs are “plentiful,” 21.6 percent expect there to be more jobs in the months ahead, and 23.8 percent anticipate that their income will increase. Lynn Franco, Director of Economic Indicators at The Conference Board, added that “Despite the recent stock market volatility … consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead.”

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Sources: Econoday, U.S. Census Bureau, ZH, Bloomberg, The Conference Board, FRBSL

Post author: Charles Couch