I cautioned right then in May 2019, even projected how the situation was almost certainly worse than the data at the time (even after the 2019 benchmarks) put it.

Sometimes these benchmark revisions are substantial, as we’ve been noting for the past half-decade or so. As is the tendency near always on the downside…I don’t think that will change at next year’s benchmark, either. Rather, it seems more likely, in my view, that durable goods (as other accounts) might be revealed to have had more of a downward skew. Something more consistent with the recent past.

Here’s the chart I produced two and a half years ago; notice the arrow at the far right:

You know where I’m going with this. It did take two years, earlier this year Census (like the Fed) would correct the record. Bonds really were right all along:

The yield curve, for example, was conspicuously pessimistic in 2014 despite what looked like in many accounts, including durable goods, an almost robust acceleration. In the hindsight of the Economic Census as well as benchmark revisions, reality has been revealed to have been far more like the UST market than the dominant narrative.

People in 2018 should take heed.

My point is not to pat myself on the back, first of all because I didn’t really do anything more than point out what should have been obvious to everyone. This was, after all, a repeating and strikingly consistent pattern.

The techniques statistical data providers use to calculate economic accounts like durable goods have had exhibited uniform trouble underestimating weakness especially around these inflection points; from reflation to the next Euro$ #n and so on.

With this tendency toward overestimating in mind, let’s look at some of the recent data beginning with – what else? – this morning’s advance durable goods orders for the month of September 2021:

That particular calendar spot of modulation is easily located in a broad cross-section of accounts, both here as well as overseas. The Census Bureau also released today, for example, its advance estimates for exports and imports; the latter germane to our current discussion.

More pronounced than the slowing in durable goods, there was no need to add the month-over-month rates to the chart:

This despite what is almost certainly another decline in wholesale inventories of automobiles and parts. We can make this assumption given the release of retailer inventories which do, at least, separate motor vehicles (below).

According to these other early numbers, overall retailer inventories dropped by a billion, or 0.2% August to September. However, ex autos retailer inventories increased by almost three billion, or 0.6% month-over-month, about the same rate as August. Unlike durable goods orders or imports, there hasn’t been any noticeable break in trend:

A ton of goods are getting through. Too many?

We don’t even know what’s still on the way, having already been ordered previously and now stuck in transit on a floating warehouse, someplace in some physical warehouse which is running out of space, maybe even sitting on a train car around Chicago (would this count as wholesale, retail, or some sort of statistical no-man’s-land in between?)

The very apparent problem here, the one being traded in bonds since, you know, around April, is that “stimulus” doesn’t actually stimulate.

This 2021 recovery narrative was merely the smoke and mirrors of that transitory burst, including CPI’s, and now the overall global system is realigning back with the 2020 recession economy from which no one had recovered (see: labor market).

Eurodollar University’s Making Sense; Episode 136, Part 1: Despite Recent Debt Ceiling T-bill Relief This Whole Year Has Been Unambiguous Dollar Woes

The mainstream is still convinced 2021 is the year of inflation, so much that even the FOMC has painted itself into its imminently infamous taper corner.

We’ve already seen one of the most important datasets (personal income!) revised for this year, would it really surprise anyone if the situation is at least a touch more to the downside risks, even if such a thing isn’t confirmed in the rest of the government’s data for another several years? That’s what bonds are and have been betting. Not just this year, every year.