The Bureau of the Census of the Department of Commerce reported today that new orders for manufactured durable goods decreased in October by $1.6 billion or 1.0% to $167.3 billion. This follows advances in the preceding two months.

I noted before in these articles that manufactured goods statistics have recently been sensitive to variations in orders for aircraft and aircraft parts. This effect was certainly in evidence this month. Orders for transportation equipment declined 10.5% in October. If transportation equipment had been excluded from this month's calculation, new orders for durable goods would have actually risen by 2.3%.

Despite month-to-month gyrations, the plot of new orders for durable goods data has been tracing out a pattern of higher lows followed by higher highs since the end of the 1990-91 recession. So, in general, the trend of this indicator is up. But, the advance for 1995 has not been as steep as in the two preceding years. From 1992 to 1993 the average change was +8.69%; from 1993 to 1994 it was +13.92%. The annualized change for 1995, thus far, is +3.68%. So, this indicator is showing evidence of a slowdown.

The Labor Department's Employment and Training Administration announced today that the number of seasonally adjusted initial claims for unemployment for the week ending November 25 had dropped 16,000 to 363,000. The number for the week ending November 18 was revised upward from 371,000 to 379,000. The average of new claims over the four weeks of November was 13.4% higher than it was in November of 1994.

Today the nation's retailers announced their same-store sales results for November. All of the major chains improved upon October's results: Wal-Mart gained 3.0% vs. 1.7% last month; K-Mart edged up to 4.3% from 4.0%; Sears gained further strength, rising to 5.1% from 4.6%; Dayton-Hudson gained 1.7% vs. 0.7%; and J. C. Penney moved from a loss of 8.3% to a gain of 1.8%.

While this month's retail results were better than last month's, it appears that the bad-new-is-good-news bond market might have concluded that they were not good enough. This morning, after all the day's news came out, the 30-year T-bond shot up a full point. It was still up 23/32 just after the stock markets closed.

Byline: Lafferty (MF Merlin)