Business spending has been a real drag through the entirety of the recovery. The so-called “corporate savings glut” has left many wondering if businesses will spend and invest and drive the economic machine like they usually do. And in the midst of a slowing in government expenditures and anemic consumer spending this is a time when the business sector is much needed. So this comment from David Rosenberg’s latest really jumped out at me:
“The good news, however, was that the key leading indicator for business spending – core capex goods orders – bounced 1.5% in August. Furthermore, the three month trend of core capex orders – one of the reliable metrics gauging the US macro pulse – is running at a healthy 8.4% annual rate.”
Rosenberg’s right. This is hugely important at this point in the cycle when the government deficit is declining and the consumer still doesn’t look 100% healthy. For now, the trend in business spending looks very healthy. Let’s hope it keeps up because if it doesn’t it’s likely that the economy won’t hang in there for long.
![Cullen Roche](https://pragcap.com/wp-content/uploads/2022/01/Headshot2022-1-144x144.png)
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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