- Prior was -2.2% (revised to -2.1%)
- Durable goods orders ex-transport 0.5% vs 0.3% expected
- Prior 0.1%
- Durable goods ex-defense 6.6% vs -1.5% prior (revised to -1.3%)
- Non-defense capital goods ex-air 0.7% vs 0.3% expected
- Prior 0.5% (revised to 0.3%)
These are very good numbers but the market reaction in the FX market was muted, although we’ve seen some downside in precious metals and upside in Treasury yields. The ex-air component has been positive for a fifth consecutive month underscoring the better demand environment.
New orders for manufactured durable goods in November, up three of the last four months, increased $16.4 billion or 5.3 percent to $323.8 billion, the U.S. Census Bureau announced today. This followed a 2.1 percent October decrease. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders increased 6.6 percent. Transportation equipment, also up three of the last four months, led the increase, $15.3 billion or 14.7 percent to $119.3 billion.
What does the US Durable Goods Orders data measure?
The US Durable Goods Orders indicator is a monthly report that tracks new orders placed with domestic manufacturers for “hard” goods, that is products designed to last three years or more.
It is widely considered a leading indicator of the economy’s health because durable goods (like washing machines, computers, and industrial machinery) are expensive, a surge in orders suggests that businesses and consumers feel confident about the future. Conversely, a drop often signals that people are tightening their belts.
It’s very rarely a market-moving report because the data is volatile and often noisy. The “advance” report (released roughly 26 days after the month ends) is frequently revised a week later in the full “factory orders” report.
What’s included in the report?
The report covers a broad spectrum of products, typically categorized into:
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Consumer Goods: Appliances (washers/dryers), cars, and home electronics.
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Business Capital Goods: Factory machinery, computers, and power tools.
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Transportation/Defense: Commercial aircraft (a massive component), ships, and military equipment.
What the markets watch?
Investors and economists don’t just look at the “headline” number. They usually dig into two specific sub-metrics to get the “real” story:
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Core Durable Goods (Ex-Transportation): Transportation orders, specifically from Boeing or the military, are so large and irregular that they can “noise up” the data. Stripping them out provides a clearer picture of steady demand.
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Non-Defense Capital Goods (Ex-Aircraft): Often called “Core Capex,” this is the most important data for many analysts. It represents pure business investment in future productivity, excluding lumpy aircraft and government spending.
This article was written by Giuseppe Dellamotta at investinglive.com.