"Capex Orders Signal Weaker Investment Activity" (UniCredit Chart)

I found an August 24 research note by Dr. Harm Bandholz, chief U.S. economist at UniCredit, that had a chart comparing the year-over-year percent change in capex orders (nondefense capital goods orders ex aircraft) versus investment activity (equipment and software) from 1996-2012. In July, capex orders fell 6.2% year-over-year (61,152 in 2012 vs. 65,197 in 2011 in millions), which was the first YoY decline since 2009. It was also a low not seen since February 2011 (59,452). Here was his outlook and the chart.

"The outlook, however, has clearly darkened, and we do not think that investment spending will be able to continue to outperform capex orders (see chart). The burden to carry the US economy remains, therefore, on the consumer." (source: UniCredit)

Source: UniCredit 

I remember I posted a chart on August 10 that showed the year-over-year percent change in revolving consumer credit (credit cards) still positive, but rolling over. So are we just in a soft patch? Or is it finally time for the Federal Reserve to prepare for war against a new recession, falling EPS, lower stock prices, and of course high unemployment (aka backstop the next head and shoulders pattern with QE3).

David Rosenberg, chief economist and strategist at Gluskin Sheff, had a chart (via ZH) that showed the year-over-year percent change in the 3-month moving average of core-capex orders going negative, which usually signals a recession.

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