New durable goods orders fell in September on August, although as many reports point out, excluding transportation (which can be volatile) durable goods orders rose 1.7%.
On their own, order growth looks healthy.
But inventories do not. Inventories have been growing for 21 months since their nadir and look high in historical terms.
Inventories have recovered quickly since the end of the recession and the economy looks exposed to an inventory correction.
But let us look at some benchmarks against which to assess inventories. For example inventories to new orders.
The ratio of inventories to new orders, bar the severe and unprecedented drop in new orders during the last recession, is the highest since the early 1990s, at at a time when global growth is extremely uncertain.
Inventory to shipment ratios for durable goods are also at their highest since the early 1990s.
Manufacturing output is dependent on solid growth going forward and current ratios suggest output will be more sensitive to slow growth to recessionary conditions.