Thursday morning, the Commerce Department announced that orders for U.S.-made durable goods dropped during November, falling 1.3% for the month. The drop was larger than the expected drop of 0.5%.

Taking transportation out of the picture, new orders increased by 2.4%, showing that the major drag on the data was transportation-equipment orders. Core durable-goods orders (which exclude defense and aircraft) increased 2.6%, a far better performance than the 3.6% decline in October. Analysts at Barclay's Capital called for a gain in core capital goods that reflect, "further expansion in the manufacturing sector."

The Commerce Department reported that durable goods orders fell 1.3% in August, to a seasonally adjusted $191.17 billion. Economists polled by the Dow Jones Newswires expected a decline of 1%.

Here is a breakdown the the subcategories in the index:

• Capital spending by business, excluding aircraft, rose 4.1%.
• Transportation equipment orders fell 10.3%. The drop was attributed mainly to a drop of 40.3% for nondefense aircraft and parts.

Wednesday morning got off to a slow start for the market as a whole, and the July home sales report didn't going to help matters much. According to the Commerce Department, new home sales plummeted 12.4% in July compared to June.

The drop brings the seasonally adjusted annual sales pace to 276,600, far short of the expected pace of 330,000. Not only is this pace short of the expected result, but it is the slowest pace on record, which dates back to 1963.

The latest durable goods report is a bit confusing. The headlines are screaming that durable orders for April rose 2.9% to $193.98 billion. It seems the 34 orders Boeing (BA) received for its 777 aircraft helped push the figure higher.

Digging a bit deeper, however, we find the report is not all that glowing. For example:

The Commerce Department reported that factory orders for December rose more than expected. Here are the numbers:

• Orders for durable goods rose 1%. The government had estimated a rise of 0.3% for December. Durables last for several years.
• Bookings for capital goods, a measure of future business investment, rose 2.2%, after a rise of 3.2%.
• Shipments of those goods rose 2.1%. These shipments are used to calculate GDP.
• The economy expanded 5.7% in the fourth quarter, the fastest pace in six years.
• Purchases of equipment and software increased 13%, the highest since 2006.
• On the negative side, new claims for unemployment rose to 480,000.
• The Institute for Supply Management report showed manufacturing in January expanded at the fastest pace in five years.
• Greater demand for notebooks and desktop computers fueled record sales for hard drives.

While these numbers are tame, the fact that we have slow, steady progress increases business and consumer confidence.

Much of the change in the economy is psychological. As we see steady improvement quarter over quarter, confidence gets restored, business replenishes inventories and consumers are buying again.

Do you believe that we are on the road to recovery?

Durable goods are products that should last more than 3 years. That usually includes things like appliances, furnishings, and heavy equipment. The Commerce Department tracks this data and the number of orders for these things popped up an extra 4.9% in July, which was a nice surprise.

Why do I care whether North Americans are buying a new fridge? This is actually a metric you should watch for insight into potential corporate profits. If durable goods (which tend to cost a lot) are being purchased at an increasing rate, it bodes well for the companies that produce and sell those products.

The much-maligned federal government's "cash-for-clunkers" program, is, nevertheless, stimulating the U.S. economy.

True, it may take new cars sales that would normally occur in 2010 and bring them forward to 2009, but that fact, combined with the extra customer traffic the program has created in the nation's auto showrooms, has bumped up auto sales -- providing a slight tailwind for the U.S. economy.

Factory orders fell 2.5% in January 2008, after a revised 2% increase in December 2007. Analysts surveyed by Bloomberg News had expected factory orders to decrease 2.6% in January 2008.

Excluding orders for transportation equipment, factory orders declined 0.4%.

Durable goods orders fell a revised 5.1%, compared with the prior estimate of a 5.3% decline. Core capital equipment orders fell 1.5%. Orders for non-durable goods rose 0.3%.

Inventories of manufactured durable goods increased 0.6%, and have risen in six of the last seven months. Unfilled orders for manufactured durable goods increased a revised 0.7%, and have increased in 32 of the last 33 months. Shipments increased 2%, following two consecutive monthly decreases.