wolfstreet.com / by Don Quijones •
Why isn’t the economy in an official recession yet?
What if it’s really different this time? What if eight years of radical monetary policies have altered the way things work to such an extent that the normal economic patterns no longer apply, that the economy has entered far into a new territory where ultra-cheap credit sloshes around, and where – instead of short, sharp recessions that clean out the cobwebs and help economic actors slough off excess debt at the expense of creditors – we get years of quagmire interrupted by mild declines and false-hope rises, even as the debt burden continues to grow and grow to suffocate all hopes at economic growth?
There have been plenty of symptoms of this. Here is one more: business investment – which plays an outsized role in economic growth. And it just booked its worst September since 2010.
The Census Bureau reported today that orders for durable goods – products and equipment designed to last over three years – inched up $2.4 billion in September, or 1% from a year ago (not seasonally adjusted), on a $4.5-billion year-over-year surge of defense capital goods. So excluding defense, orders fell 2.3% year-over-year.
Excluding defense and aircraft – to approximate business investment – orders fell 3.6% year-over-year (not seasonally adjusted).
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