Wall Street Journal Regurgitates Misleading Government Data on Durable Goods

Jon Government, Market Commentary

The Wall Street Journal today dutifully reported the Commerce Department’s seasonally adjusted data on Durable Goods orders in July, proclaiming:
U. S. Durable-Goods Orders Rebounded in July, Jumping 4.4%
However, the actual, not seasonally adjusted data tells another story. It’s easy to actual data to tell if the momentum of the business is gaining or losing ground. Just compare the year to year change for the current month with immediate past months.
The actual data showed a year to year decline of -6.4% and a month to month decline of -13.7%.
That doesn’t tell us much on a standalone basis. We need to compare that to past data to see the momentum of the business. The year to year decline of -6.4% in July was indeed a hair better than June’s drop of -6.7%. However the July drop was larger than each of the 10 months prior to June. That’s a pretty weak basis for claiming that July had an increase of 4.3%. It’s easy enough to see on a chart however.

This post was published at Wall Street Examiner on August 25, 2016.