Durable Goods Orders: A Deeper Analysis

Earlier today I posted a commentary on the July Advance Report on June Durable Goods Orders. This Census Bureau series dates from 1992 and is not adjusted for either population growth or inflation.

Here is a chart of the same data shown with two adjustments, the red line shows the goods orders divided by the Census Bureau’s monthly population data — durable goods orders per capita. The blue line goes a step further and adjusts for inflation based on the Consumer Price Index, chained in current dollars.

Durable-Goods-Orders-real-per-capita

Here is the same chart, this time ex Transportation.

Click to View

As these charts illustrate, when we study durable goods orders in the larger context of population growth and also adjust for inflation, the data becomes a coincident macro-indicator of a major shift in consumption demand within the U.S. economy. It helps to explain the trend of declining GDP that I’ve illustrated elsewhere. See especially Economic Growth in the U.S. Since 1930.

Doug Short Ph.d is the author of dshort.com.