Durable Truths and Exports

By January 30, 2008Trade

Interesting nuance in the AP story on yesterday’s economic reports:

NEW YORK (AP) — Orders to factories for big-ticket manufactured goods jumped unexpectedly in December, good news amid signs that the U.S. economy may be tipping toward a recession.

Still, analysts said the 5.2 percent growth in orders — while potentially boosting industrial output in coming months — likely came from overseas demand and that domestic growth faced continuing threats from tight credit and mortgage markets that have forced consumers to retrench.

A supernumerary “still,” don’t you think? One that diminishes the good news?

Bloomberg tells it straight in this story, and we appreciate the third paragraph:

“This report is a relief,” said Ian Morris, chief U.S. economist at HSBC Securities USA Inc. in New York. “The fear was that capital spending could collapse, which could then see jobs plunge.”

Both stories quote the National Association of Manufacturers’ chief economist, David Huether, from the NAM’s news release. We highlight this quote (not in the stores):

“Manufacturers of big ticket items such as machinery, communications equipment and aircraft, are seeing a pickup in demand,” Huether said. “In December we saw the second consecutive monthly rise in durable goods orders and the fastest increase since last July. A large amount of these American made products are being shipped overseas thanks to solid economic growth abroad, free trade agreements that lower barriers for domestic manufacturers, and a more properly aligned dollar that makes U.S. manufactured goods more competitive globally.

UPDATE (10:15 a.m.):

The American economy expanded by a surprisingly weak 0.6 percent from October to December, the government reported Wednesday, offering the latest indication that the United States is already in the midst of a substantial slowdown and perhaps a recession.

Slowdown, yes, agreed. But under what definition can “expanded” and “perhaps a recession” be reconciled? A recession is two consecutive quarters of declining GDP.

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