|Issue of the Day: U.S. Durables Rise in February|
Published Wednesday, March 25th, 2009
A new Commerce report indicates that orders for U.S. durable goods has risen unexpectedly 3.4% in February on the demand for machinery, computers, and defense equipment. This is the biggest increase in a year and the first in seven months according to the Commerce Department. This report also stated that there are some improvements in retail sales, including residential construction and home sales. Buyers seeing deals in the housing market are driving sales up 4.7%. On the back of this news, stock index futures rose and treasury yields were up two base points from yesterday. Some experts see this as an indicator of economic recovery.
The growth of the Real GDP, the size of an economy adjusted for price changes and inflation, has been slowing for a number of years. As of 2007, the Real GDP only increased 2.0% and in 2008 the GDP increased 1.1%. Contributing to the growth slowdown is the negative trade balance which actually shrank for the second year in a row from its sharp decline. As the recession grew, Americans bought fewer imports, which normally would be a good thing. However, at the same time, the rate of change in US exports also declined (not as great as imports hence the negative shrinkage) as the annual rate in change for export totals narrowed from $15.4 billion increase in 2007 to $1.3 billion increase in 2008.