Capital Goods New Orders Up 9.8% in September
According to the Census Bureau, real capital goods new orders in September 2013 were $97,432 million. This is an increase of 9.8% compared to September 2012. This is the fifth time in the last six months that the month-over-month rate of growth has been positive. As a result, the annual rate of change has grown three of the last four months.
A good leading indicator for real capital goods new orders is real consumer spending. As consumers spend more on all goods, businesses need more capital equipment to make the goods consumers are buying. Since October 2011, the rate of growth in real consumer spending has been slowly decelerating. There are many historical instances where the current pattern in real consumer spending has led to accelerating growth in real capital goods new orders. Therefore, it looks like the accelerating growth trend in real capital goods new orders should continue.
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