Saturday, August 30, 2008

Export adjusted Capital Goods

We have mentioned two days ago that non-defense ex aircraft capital goods portraited a rosy picture where business consumers have been spending to shore up sagging economy. Non-defense ex aricraft figures have not showed sharp drop since 2006. Some analysts think it was lead by exports due to weaker dollars. This chart indicates the impact of weaker dollar on durable goods. As shown, the exports in capital goods has soared almost ~70% while non-defense ex airecraft items only surged ~10% since 2006.
But it is worth mentioning that capital exports flatten out since the begining of 2008, indicating the strong demand form overseas is fading. If we adjust non-defense using exports, the QoQ domestic non-defense ex aircraft increased moderately (annualized QoQ around 5% in Q2 08). But the figure was negative in Q1 08. It means that US domestic business consumers did invested more in capital goods in Q2 compared to Q1.

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