Exactly how do the financial media and talking heads see today’s manufacturing data report as suggesting that business investment is accelerating?  Accelerating means the growth rate (velocity, or rate of change) is increasing, but it certainly is not, no matter how the data is sliced – see data tables below for three popular metrics:

• capital goods orders
• non-defense capital goods orders
• non-defense capital goods orders, excluding aircraft and parts

In fact, as we previously noted was our expectation, all of their monthly growth rates peaked in Dec, while their more lagging and recent three-month and six-month growth rates peaked variously from  Dec to Feb, and their most-lagging 12-month growth rates peaked in Feb, or undoubtedly will so over the next few months.

© 2004 Bob Bronson
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Bob Bronson
Bronson Capital Markets Research
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April 24, 2004