Durable Goods Orders Fall By Most In 3-1/2 Years, 2Q12 GDP Revised Down, Jobless Claims Lower:
Orders for durable goods, manufacturing goods intended to last at least 3 years or more, fell due to the increasingly sluggish U.S. economy. New orders for durable goods dropped by the largest amount in three and a half years suggesting the manufacturing sector is still in contraction mode. Businesses are finding it difficult to plan with an impending fiscal cliff ahead and general uncertainty has kept CEOs from making large buys in a tepid economic environment. Durable goods orders fell 13.2 percent the Commerce Department said today and this surprised many economists and analysts who have been looking at the housing market as a sign of strength.
Second Quarter 2012 GDP Revised Down From 1.7 Percent To 1.3.
The Bureau of Economic Analysis said today the U.S. economy grew slower and revised the second quarter growth rate. The U.S. economy grew at 1.3 percent as opposed to the estimate of 1.7 percent that was released earlier in the year. The economic news related to jobs has been lackluster with the jobless rate above 8 percent for 43 consecutive months which is indicative of an economy standing still but not necessarily in full blown contraction.
Jobless Claims Fall Sharply by 26,000
There was some positive economic news today. Jobless claims fell by 26,000 for the week ended September 22, 2012 the Labor Department said today. This brought the jobless rate down to 359,000 people and there is a possibility the jobless rate could fall below 8 percent if the labor force participation rate continues to dwindle.
The economic data released today was largely negative but this doesn’t change our outlook on the markets. We believe weakness in equities this week is a buying opportunity and prices could go higher to end the month on a positive note. Apple hasn’t made a comeback yet but the small caps are holding support levels.