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**Frannypaync** · 02-26-2006, 04:42 PM

The plunge in durable goods orders was due almost entirely to a dramatic drop in orders for aircraft, a number which fluctuates wildly from month to month:

This is taken from "Marketwatch" website:Aircraft orders fell 68.2% in January after averaging more than three times the normal level from October through December. Even with the decline, aircraft orders were slightly above average in January.

These numbers should never be used for attention grabbing headlines. In fact, orders are up more than 5% on a year-over year basis when compared with January 2005, and even the month of January 2006 showed a smal gain - .6% - when transportation orders are removed.

The last three months of 2005 were strong for the airline sector, in terms of new orders and interest from other nations in ordering from the US. The positive results will ripple through the manufacturing sector for several months, but there is always a sharp drop in the orders number following a burst of new orders. The last quarter of 2005 was exceptionally strong for this sector, so the drop was corresepondingly large.

So your theory that this number is indicative of the economy as a whole is false. In fact, the current quarter is quite strong, and GDP should rise about a 5-6% rate. There are plenty of problems with the economy - I am the first to admit - but right now the expansion is solid.

02-26-2006, 04:42 PM	#6
Frannypaync Join Date Nov 2005 Posts 402 Senior Member	The plunge in durable goods orders was due almost entirely to a dramatic drop in orders for aircraft, a number which fluctuates wildly from month to month: This is taken from "Marketwatch" website:Aircraft orders fell 68.2% in January after averaging more than three times the normal level from October through December. Even with the decline, aircraft orders were slightly above average in January. These numbers should never be used for attention grabbing headlines. In fact, orders are up more than 5% on a year-over year basis when compared with January 2005, and even the month of January 2006 showed a smal gain - .6% - when transportation orders are removed. The last three months of 2005 were strong for the airline sector, in terms of new orders and interest from other nations in ordering from the US. The positive results will ripple through the manufacturing sector for several months, but there is always a sharp drop in the orders number following a burst of new orders. The last quarter of 2005 was exceptionally strong for this sector, so the drop was corresepondingly large. So your theory that this number is indicative of the economy as a whole is false. In fact, the current quarter is quite strong, and GDP should rise about a 5-6% rate. There are plenty of problems with the economy - I am the first to admit - but right now the expansion is solid.
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