Mon, Jul 22, 2024

USD: US Economy: Durable Goods Orders Up

US Durable Goods orders picked up 0.70% in the April month when compared to 0.80% in the March month. Aircraft related orders picked up nearly $1.1 Billion Worth. Excluding Aircraft orders only 0.40% printed in the Durable goods orders. This is the 3rd straight month increase in the Durable Goods orders. US Dollar moved down after the data printed today.

USD Index Market price is moving in Ascending channel and market has rebounded from the higher low area of the channel

USD Index Market price is moving in Ascending channel and market has rebounded from the higher low area of the channel

Dollar Index will…?

Welcome to Investopedia’s live economics coverage, where we delve into the day’s economic developments and their implications for the U.S. economy and your financial well-being. Here, we analyze data releases, economic indicators, insights from experts, and other relevant information to provide clarity on economic matters and their significance to you.

Today’s highlight is the unexpected rise in durable goods orders, defying economists’ projections of a decline, while final estimates of consumer sentiment are anticipated to remain relatively stable.

Surprise Surge in Durable Goods Orders Driven by Aircraft Sales Marks Third Consecutive Month of Growth

Just 35 minutes ago, it was revealed that new orders for durable goods surged by 0.7%, marking the third consecutive monthly increase and catching economists off guard with an unforeseen spike in aircraft orders.

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The notable increase in transportation equipment orders, up by $1.1 billion, primarily fueled by aircraft sales, has also experienced a three-month ascent. Excluding transportation sales, new durable goods orders saw a 0.4% uptick, as reported by the Census Bureau.

Although April’s rise in durable goods orders didn’t match the robustness of March’s figures, which were revised downward to 0.8%, the data surpassed economists’ expectations. Analysts surveyed by the Wall Street Journal and Dow Jones Newswire had forecasted a 0.5% decline in durable goods orders, a crucial measure of U.S. business investment.

Bernard Yaros, lead U.S. economist at Oxford Economics, noted that core capital goods orders, indicative of the underlying trend in capital spending, exceeded expectations and reversed the previous month’s decline.

Additionally, Sal Guatieri, senior economist at BMO Capital Markets, highlighted a continued upsurge in motor vehicles and parts orders for the sixth consecutive month, suggesting potential strength in second-quarter gross domestic product (GDP) growth.

Despite challenges such as elevated borrowing costs and stringent loan standards, Guatieri expressed optimism about a potential uptick in U.S. business investment in the second quarter. However, he cautioned that the manufacturing sector may continue to operate at a subdued pace until interest rates ease, the dollar weakens, and the global economy shows signs of strengthening.

USD: U.S. Durable Goods: Third Consecutive Month of Growth, Possible End to Slump

In April, U.S. durable goods orders increased by 0.70%, following a slightly higher surge of 0.80% in March. Notably, orders related to aircraft saw a substantial uptick, totaling nearly $1.1 billion. However, when excluding aircraft orders, the increase in durable goods orders was more modest, standing at 0.40%.

EURUSD is moving in the Descending channel and the market has fallen from the lower high area of the channel

EURUSD is moving in the Descending channel and the market has fallen from the lower high area of the channel

Will EURUSD fall?

The release of this data had an impact on the value of the U.S. dollar, causing it to depreciate. This movement in the currency market occurred in response to the information revealed by the durable goods orders report.

Orders for durable goods in April exceeded expectations, registering a 0.7% increase, according to data released by the Commerce Department on Friday. This marks the third consecutive monthly gain in durable goods orders, defying economists’ projections of a 0.5% decline. Durable goods, which encompass products designed to last at least three years, saw a notable surge in demand.

When excluding transportation, orders still demonstrated resilience, rising by 0.4%. Moreover, core capital-goods orders, a measure that excludes volatile sectors like transportation and defense, rebounded by 0.3% last month after experiencing a slight dip of 0.1% in March. Shipments of these core orders also saw a 0.4% uptick in April.

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A significant portion of the increase in orders stemmed from the defense sector, while orders excluding defense remained flat in April. Transportation goods also contributed to the positive trend, with orders rising by 1.2% following a 2.5% gain in the previous month.

Despite concerns surrounding Boeing Co (BA), which reported a decrease in aircraft orders from 113 in March to only seven in April, the overall durable goods sector showed resilience. Economists anticipated a subdued report, largely attributing it to Boeing’s challenges.

The consecutive months of gains suggest a potential shift in manufacturing dynamics, possibly indicating a departure from a neutral stance. Manufacturing has been grappling with various challenges, including high interest rates, a robust dollar, and a sluggish global economy, as noted by Sal Guatieri, senior economist at BMO Capital Markets, in a pre-release analysis.

USD: April’s Durable Goods Orders Surge, March Revised Down

In April, there was a 0.70% increase in U.S. durable goods orders, slightly lower than the 0.80% growth recorded in March. Notably, orders related to aircraft amounted to nearly $1.1 billion. However, when aircraft orders are excluded, the increase in durable goods orders was only 0.40%.

USDCAD is moving in an Ascending channel and the market has rebounded from the higher low area of the channel

USDCAD is moving in an Ascending channel and the market has rebounded from the higher low area of the channel

USDCAD will…?

Following the release of this data, the U.S. dollar experienced a decline.

In April, durable goods orders in the U.S. saw a month-over-month increase of 0.7%, surpassing expectations of a 0.9% decline. However, this growth was slightly slower than the 0.8% pace recorded in March, as reported by the U.S. Department of Commerce. Notably, the March figure was revised down from the initially reported 2.6% surge.

Core durable goods orders, which exclude transportation, showed a month-over-month increase of 0.4%, exceeding the expected 0.1% rise and accelerating from the 0.2% growth observed in March.

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Durable goods orders excluding defense remained unchanged in April, halting the 1.2% growth experienced in the previous month (revised from +2.3%). Non-defense orders, excluding aircraft, advanced by 0.3%, compared to an expected increase of 0.1%, and a previous decrease of 0.1% (revised from +0.2%).

Shipments of manufactured durable goods rose by $3.4 billion, or 1.2%, reaching $285.7 billion in April. This marks the third consecutive month of increases, following a 0.1% rise in March. Within this category, transportation equipment shipments also experienced three consecutive months of growth, increasing by $3.1 billion, or 3.4%, to $93.0 billion.

Furthermore, unfilled orders for manufactured durable goods in April continued their upward trend for the 45th consecutive month, rising by $3.1 billion, or 0.2%, to $1.401 trillion. The transportation equipment sector primarily drove this increase, with unfilled orders rising by $3.2 billion, or 0.4%, to $906.7 billion. The U.S. Census Bureau, part of the Commerce Department, noted that this marks 42 increases in the last 43 months for this sector.


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