Economy still struggles with durability

Alisa Roth Nov 28, 2007


Scott Jagow: The U.S. economy has displayed quite a bit of toughness in recent months. The problems in the housing and credit markets haven’t sunk the ship.

But there are certainly leaks. This morning, the government said orders for durable goods fell in October for the third straight month. More now from Alisa Roth.

Alisa Roth: Durable goods are items designed to last at least three years, like cars, appliances, electronic equipment. Orders for those goods dropped by 0.4 percent in October. But take out defense spending — which is expensive — and it dropped by 2.3 percent. That’s the biggest drop since February.

Ryan Reed is an economist at National City:

Ryan Reed: The credit crunch has certainly put some fear into some businesses as far as their long-term prospects. It’s down this month, but marginally down, and not too much off of the trend that we’ve been seeing this year. So it’s not something that I’m worried about yet.

The durable goods numbers are known for their volatility. And Reed says it’ll take at least a few more months of big drops before he gets really nervous.

But this month’s numbers — especially when taken with declines in August and September — do suggest manufacturing is slowing down.

In New York, I’m Alisa Roth for Marketplace.

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