June 25, 2020
Durable goods orders rebounded by 15.8% in May after having plunged by 18.1% in April after having fallen 16.7% in March. The imposition of the stringent measures put into place in mid-March to stop the spread of the corona virus as taken a serious toll on the manufacturing sector, but the gradual re-opening of the country resulted in an earlier-than-expected. We have seen this same behavior in payroll employment, retail sales, and now durable goods orders.
Much of the decline in both months was in the transportation sector — airplanes, cars, and trucks — which surged by 80.7% in May after having plunged by 43.2% and 48.6% in March and April. Excluding the volatile transportation sector durable goods orders fell 8.2% in April but then climbed by 4.0% in May.
.We expect second quarter GDP to decline 50%. But then, because the corona virus is showing signs of slowing its pace of spreading, and because we have two fiscal stimulus packages totaling $2.5 trillion that are in the process of distributing money to consumers and businesses, we expect Q3 GDP to climb by 51.0% followed by 7.0% growth in Q4.
Stephen Slifer
NumberNomics
Charleston, SC
Stephen,
It fascinates me that in the middle of one of the most gummed up Congress in decades which does not seem to get much of anything done one way or the other, business continues to surge forward beyond expectations. Maybe we are better off with a government that does less instead of more. All we do have to be concerned about is how much more of the wealth of our country gets held in the hands of the “1%” while much of the “99%”, especially those in the lower segments of that large group live in a less than middle class environment. Maybe you have answers to that dilemma.
…Darrel