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Business investment remains very strong

Once again, new orders for Capital Goods—i.e., business investment—exceeded expectations. December orders were up 1.4% (vs. an expected 1.3%), on top of upward revisions to the data for the previous two months. Over the course of last year, business investment has increased by 15.5%, a staggering figure. If any part of this recovery can be termed "V-shaped," this is it.

(I'm using a 3-mo. moving average in this chart because the raw data are plagued by a seasonal adjustment flaw that doesn't fully correct for what appears to be a tendency for orders  to surge at the end of each calendar quarter.)

Strong gains in business investment reflect the return of confidence to the business sector, while at the same time laying the groundwork for future gains in productivity.

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