Numbers Ain’t What They Used to Be in Turbulent U.S. Economy

There is a rule of thumb in data monitoring that you need to watch the revisions if you want to understand which way things are going. What happens in capital spending could be a case in point.

The Commerce Department reported Thursday that orders from US manufacturers of durable goods increased by 2.3% in May compared to April, lower than the profit of 2.6% expected by economists. Much of this increase was due to an increase in aircraft orders, which are often inconsistent.

The element of the report that economists focus on to assess investment plans – non-defense capital goods excluding aircraft – is down 0.1%. Most had expected an increase.

But then there were significant corrections to April’s durable goods numbers, which now show that non-defense capital equipment, excluding aircraft, orders rose 2.7% in April versus March, up from an initially reported increase of 2.2 %. That was the biggest monthly increase since July last year, when the US economy was still tumbling out of the spring shutdowns.

Revised data usually provides a more complete picture of what happened. For example, when the Ministry of Labor publishes its monthly employment figures, it has data of approx three quarters of employers it overlooked. In the next two months, this response rate is usually over 90%.

If the companies that respond to a survey early are facing the same conditions as those that respond late, the data revisions should be minor, but often this is not the case. For example, larger companies can often respond sooner, and companies in some industries tend to be more responsive and may face very different circumstances than others.

These disparities could be particularly pronounced now as the economy increases demand, and shifts in consumer preferences Supply chain bottlenecks triggered by the easing of the Covid-19 crisis. Once more complete data is available, the Department of Commerce may well revise its capital goods orders higher.

Revisions can of course cut in both directions. When the Department of Commerce reported May new home sales On Wednesday, it has revised its April numbers significantly lower, as were the sales figures in March. Perhaps the May dates will also be put down.

In an unusual economic environment, first impressions can be misleading.

Write to Justin Lahart at

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