Business Equipment Expenditures Look Rosy

The Lehmann Letter (SM)

The Census Bureau reported some good news today regarding business investment:

http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf

New orders for business equipment rose in October.

But the chart provides an even stronger impression of recovery. October orders were $70.8 billion, a dramatic improvement from their $50+ billion low.

New Orders for Business Equipment

Click on chart to enlarge.)

Recessions shaded

If you use your mind’s eye to update the chart with the latest $70 billion reading, you can see that businesses are planning for a brighter future.

That’s an important sign that businesses are willing to increase production. It offsets the sluggishness in consumer demand for homes and cars.

So we have a struggle. Can business optimism prevail over households’ pessimism? Stay tuned.

(The chart was taken from http://www.beyourowneconomist.com. [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2010 Michael B. Lehmann