This morning, markets dropped briefly after the December durable goods orders data missed consensus estimates by a mile.
Total orders crumbled 4.3% in December (a 1.8% gain was expected), while the previous print was revised down to 2.6% from 3.5%.
“Bottom line — This was a very weak report, and it suggests that the U.S. economy ended the year on very weak footing,” TD Securities’ Millan Mulraine wrote clients after the report.
“In some sense, the weak tone of this report could take on added significant since it is unlikely to have been due to weather conditions, and in that regards it provides a much cleaner gauge on the underlying tone of domestic economic activity in December,” he said.
The durable goods report dovetails with a spate of other disappointing economic data releases.
A lot of that disappointment has been blamed on really cold weather, and market observers seem mixed on whether this string of poor economic figures is a one-off cold front or an endemic problem.
First there was the December jobs report, where only 74,000 workers were added to nonfarm payrolls.
That was a monster miss, leaving economists scratching their heads about the weather.
But durable goods versus weather is harder to explain, according to some market strategists.
“There are a lot of ways to look at and interpret the durable goods report especially if you want to play the weather card,” writes GMP Securities’ Adrian Miller. “But when we take the unexpected decline in December and notable downside revision in November, there is no getting around the fact that business investments was simply not a strong as first thought.”
“In short, the U.S. economy, not unlike many advanced economies need to see a notable pick up in business spending if we are to see a broadening and quickening in growth momentum in 2014,” he wrote.
So basically, everyone was really amped for 2014, but we’ve started the year with a bunch of crappy reports and market sell-offs. Maybe it was the weather, maybe it was something worse. We’ll have to wait for more data to find out.
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