Good news for the economy was bad news for stocks and bonds this morning. Both markets slumped soon after the Bureau of the Census announced that new orders for manufactured durable goods had increased in August by a higher-than-expected $7,652 million, a gain of 4.9%.

A "good" is deemed "durable" if it has a useful life of 3 years or greater. Durable manufactured goods include such items as planes, trains, automobiles, TV's, refrigerators, and my old Atari computer (which, by the way, still endures regular rollicking rounds of Donkey Kong).

From January to July of this year the indicator moved down from $164,507 million to $156,225 million, a drop of 5.03%. But, the newly-announced August reading of $163,877 million is higher than all preceding months, except January.

New orders for durable goods have been trending generally upward since the end of the 1990-91 recession. This is good economic news because the orders wouldn't be growing if somebody wasn't out there buying the stuff faster than the factories were turning it out.

Pat Ellis (MF Merlin)

Transmitted: 95-09-27 17:09:59