Capital Goods Orders Flat in January
According to the Census Bureau, real capital goods new orders in January 2014 were $74,298 million. January's new orders were unchanged compared to one year ago. In four of the last six months, real capital goods new orders have grown or been flat compared to one year ago. The annual rate of change, 4.8%, reached its fastest of growth since July 2012. This is the sixth consecutive month of growth in the annual rate of change. However, with the monthly and quarterly growth rates slowing down, it is likely that the annual rate of change will peak soon.
A good leading indicator for real capital goods new orders is real consumer spending. Since May 2013, the annual rate of change in real consumer spending has been flat. This means that consumer spending is growing at a constant rate. There are several historical instances where a constant rate of growth in consumer spending has indicated an accelerating rate of growth in real capital goods new orders.
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