Positive headlines are welcome, but they do not accurately portray long-term trends.
Monday’s headline was all about the better-than-anticipated durable goods numbers. The fiscal cliff and projections of economic disaster were all we heard less than a month ago; now there are reports touting a stronger economy in the second half of 2013. The quick switch underscores the perils of using headlines to forecast where your business is heading next.
The increase in durable goods new orders is indeed good news. The rebound is consistent with our projections of improved business-to-business activity in 2013. Expect the first half of the year to be busier than the latter half.
Regular readers know that we utilize our proprietary cyclical theories, endogenous trends, and key leading indicators. Two of these indicators are suggesting that optimism regarding a stronger second half of the year is ill-founded. The US Leading Indicator 1/12 rate-of-change and the Corporate Bond Prices 12/12 rate-of-change are both signaling that the US economy will be slowing down later this year.
I thought you might like to know that we have computed our accuracy rate for 2012. Our forecast accuracy for four quarters out for industries is 96.2%. Despite all the uncertainties, fears and misleading headlines, through ITR Economics™ you can indeed know what economic changes will be impacting your company.