2/27/2005

Why are durable goods declining?

In the article, U.S. Jan durable goods orders drop on cars, planes, it talks about how the demand for long lasting American goods which is goods lasting for three or more years are declining. This decline in durable goods comes as a bite of surprise because “Wall Street economists had expected durable goods order to rise 0.1 percent.” A 9.8 percent decline happened in the defense capital goods which was also a shock because there was a 56.9 percent advance in military aircraft orders. The demand for computers, vehicles, and aircraft was also down. Yet, the demand for metals and machinery where up. What could be causing this trend? Will it hurt growth in the coming year?

2 comments:

kenny said...

I don’t believe the decline in durable goods produced will hurt the economy. The GDP continues to grow each year despite the declining durable goods. If Americans are producing more I don’t think it maters what they are producing.

Dr. Tufte said...

What does this have to do with ManEc?

I wouldn't worry too much about this - it sounds like a routine short-term fluctuation.