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Last week’s data on durable goods might be the most important piece of data we’ve seen in many months.  As David Rosenberg has previously noted, durable goods have a disturbingly high correlation with jobs growth over the last 15 years.  This chart shows just how tightly correlated the labor market is with the change in durables.   Last week’s data showed the second consecutive downtick in durable goods orders.  While this is by no means a trend it does appear to rhyme with the continuing weakness in the labor market and the hesitancy of companies to bring on new workers.  The next few readings could be quite telling.  Renewed weakness in durables could be a good sign of what’s to come.

Source: GS

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