Economists often note that durable goods orders is one of the more volatile economic indicators that we get every month.

However, there wasn't much sugar-coating anyone could do to the Thursday's report that showed durable goods orders plunged 13 percent in August. Economists were looking for a 5.0 percent decline.

In his latest Breakfast with Dave note, David Rosenberg points to one sub-component of the durable goods report that sent a particularly scary signal.

The three-month moving average of core capex orders (i.e. nondefense capital goods excluding aircraft) was -4.1 percent in August.

"History shows when the trend weakened to the level we see today, the economy was in recession 100% of the time," wrote Rosenberg. "So stick that in you pipe and smoke it!"

This is also bad news for jobs. According to Rosenberg's data, this measure has an 83 percent correlation with private employment.

Rosenberg also notes that durable goods orders has an 86% correlation to the stock market.

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