The Disappeared Economy

This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
At the end of April 2015, the Commerce Department reported that unadjusted durable goods shipments (ex transportation) had totaled $177.6 billion in the month of March 2015. That represented just a half of one percent year-over-year gain, but at a crucial moment in economic history the plus sign was quite welcome for the attempt at the ‘transitory’ narrative. That estimate, however, was made using a benchmark process set the year earlier, one that didn’t fully incorporate the 2012 Economic Census.
There have been three annual benchmark revisions since that time, each pushing the estimate lower and lower. The latest, the May 2017 set of revisions, now figures durable good shipments contracted by 1.4% that pivotal March. It may not seem like much of a difference +0.5% to -1.4%, but that is only because we cannot straight away conceive of the effect in non-linear fashion, the absence of compounding.

This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ May 26, 2017.