Data released yesterday show that the durable goods orders rose by 4.4 percent in July and 1.5 percent when transportation is excluded. That is quite a figure and should spark optimism. Yet, we at FxWirePro, are left with concerns rather than feeling relieved. When assessing the data, the first thing you need to remember is that the monthly data tends to be volatile. For example, in June, as per the revised figure durable goods orders declined by 4.2 percent and by -0.3 percent when transportation is excluded.

Now, when we look at the yearly figure, it looks nothing less than terrible. The chart shows the yearly growth in the value of manufacturers’ shipments of capital goods (nondefense, excluding aircraft) and it is at the worst position since the crisis of 2008/09. There hasn’t been a positive reading since July last year. Currently, the growth rate is just -7.1 percent.

No wonder, there has been so much discussion lately on secular stagnation.