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Capex continues very strong




Capital goods orders rose 4.1% in August, and July orders were revised up almost 3%, thus snuffing out any concerns that arose last month about a possible double-dip. Over the past six months orders are up at a very strong 23% annualized pace. This is undeniably good news, since it means that businesses are confident enough in the future to be investing in new plant and equipment, the seedcorn of new jobs and future productivity gains.

Update: I had some trouble getting this chart to show up correctly, but I think it works now. I'm also now more convinced that this series suffers from some faulty seasonal adjustment, since the first month of every quarter is always strong. So I'm going to stick with a 3-mo. moving average which gets rid of that problem. In any event, the 6-mo. annualized growth in capex is over 20% no matter how you measure it.

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