Durable goods orders
One of the important economic indicators, the Durable Goods Report (April), has been released,
the orders for core capital goods (excluding defense-related and aircraft) are strong.
Capital goods refer to equipment such as machinery, buildings, and tools related to investment.
However, inventories are rising, and the shipment-to-inventory balance, which is the year-on-year growth rate of shipments minus the year-on-year growth rate of inventories, is sharply declining. When this happens, the growth rate of orders and shipments tends to slow. However, how long it will take to start declining is unknown.
In the end, current capital expenditure conditions are solid, but a slowdown is almost certainly beginning. However, the speed of the slowdown is uncertain.
Therefore, the market is probably unsure how to interpret this data. That said, regarding this data alone, it does not indicate an imminent recession.
Not a highly meaningful explanation, but just for confirmation.
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