New data shows durable goods orders have risen for a second straight month, drastically beating expectations. The increase in demand, combined with the resilient job market and rising wages, suggests the corporate media narrative playing up fears of a recession is likely influencing negative consumer surveys and polling more than economic reality.
Durable goods orders were up 0.9 percent in February, beating expectations of a one percent decline. The increase was predominantly fueled by a surge in demand for industrial equipment and consumer goods like computers, appliances, and automobiles. Excluding transportation equipment, durable goods orders were up 0.7 percent, suggesting broad-based industrial strength continues.
Notably, computer and appliance demand was up 1.1 percent and two percent, respectively. Meanwhile, machinery demand was up 0.2 percent, and automobile demand was up a stunning four percent. With January’s data revised to a 3.3 percent increase, this suggests that overall, the U.S. manufacturing rebound is far stronger than indicated by consumer confidence surveys and business expectations surveys.
The new data should allay growing concerns over a potential recession. Economic downturns typically do not occur when demand surges and the job market remains robust.
Additionally, the durable goods data indicates the Trump White House’s trade tariffs are not depressing consumer demand overall. While the reciprocal tariffs will take effect next week, markets have predominantly priced in the increased costs, which appear to have had negligible impact on purchasing.
