The government released the figures for durable goods orders in June. They were way up with a growth rate of 4.5%, about triple the expected number. That's great, but the problem is that excluding transportation, the figures were flat instead of the increase which was expected. So June was a great month for cars while the rest of this portion of the economy was stagnant.
What does this mean? It is hard to generalize from one month's figures, but they seem to indicate that the aging fleet of cars across America is pushing people to buy new cars even though the economy is uncertain. This is raising auto output and the industries that depend on automobile sales. The rest of the economy is treading water. The only question is whether rising auto sales will pull the rest of the economy out of its torpor or if the stagnation elsewhere eventually pulls down auto sales.
What does this mean? It is hard to generalize from one month's figures, but they seem to indicate that the aging fleet of cars across America is pushing people to buy new cars even though the economy is uncertain. This is raising auto output and the industries that depend on automobile sales. The rest of the economy is treading water. The only question is whether rising auto sales will pull the rest of the economy out of its torpor or if the stagnation elsewhere eventually pulls down auto sales.
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