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• The U.S. Census Bureau is committed to providing high quality data in a prompt and efficient manner to our customers.
• Given the global scale of manufacturing, trade wars between countries can also lead to businesses and consumers retrenching their spending on new equipment and appliances.
• Core durable goods orders are used as an indicator of the current and near-term future health of the economy by businesses, investors, and policymakers.
• It’s yet another economic indicator that is somewhat on the fence about the possibility of a future recession.
• It can skew the month-to-month results if a large order for some items comes through one month.

Census Bureau show new orders for domestic-made goods such as factory equipment declined by $2.6 billion, or 1%, in February. Get this delivered to your inbox, and more info about our products and services. Business investment is running slightly ahead of last year’s pace, but it has weakened considerably, and many manufacturers are treading water. Economists polled by the Wall Street Journal had forecast a 4.1% drop in July following a 4.4% spike in June. The topsy-turvy results in the past two months are almost entirely due to Boeing. Here’s what would close and stay open in the event of a partial government shutdown on Oct. 1, and what services would be affected.

What does this mean for investors?

Compared to the rates in the second quarter 2022, the second quarter 2023 rates in the Northeast, South, and West were higher, and the rate in the Midwest was not statistically different. July 2023 end-of-month inventories were $784.1 billion, up 0.3 percent (+/- 0.2%) from last month. Manufacturing corporations’ seasonally adjusted after-tax profits were $206.1 billion for the second quarter of 2023, down $21.8 (+/- 0.6) billion from first quarter of 2023. These orders exclude military spending and the auto and aerospace industries. Not only do consumers make durable goods purchases less frequently than other items, there is also often a discretionary element to their spending habits.

Therefore, excessive robot activity on Census websites is prohibited. New orders for manufactured durable goods in July, down following four consecutive monthly increases, decreased $15.5 billion or 5.2 percent to $285.9 billion. New orders for manufactured goods in July, down following four consecutive monthly increases, decreased $12.7 billion or 2.1 percent to $579.4 billion. The nation’s international trade deficit in goods and services increased to $65.0 billion in July from $63.7 billion in June (revised), as imports increased more than exports. U.S. retail and food services sales for August 2023 were $697.6 billion, up 0.6 percent (+/-0.5 percent) from the previous month.

Consumer Durable Goods

Higher borrowing costs discourage consumers from spending and businesses from investing. As the supply chains have struggled to cope with lockdowns and increased demand from consumers, it has made manufacturing in these areas a difficult task. With the world slowly returning to normal, there are new challenges now rearing their heads in the sector. The economy contracted 5.1% in the first quarter of 2020, kicking off the 2020 recession.

• The durable goods orders take into account all orders and unfilled orders of durable goods and shipments for the preceding month.
• Once you link to another site you are subject to the policies of the new site.
• Durable goods orders data can often be volatile and revisions are not uncommon, so investors and analysts typically use several months of averages instead of relying too heavily on the data of a single month.
• Durable goods are those that generally last for more than three years and do not need to be replaced frequently.

What’s more, a key measure of business investment also declined for the second time in four months. However, the majority of these increases can be put down to rising prices as a result of sky high inflation, rather than a material increase in the number of orders being placed. It’s yet another economic indicator that is somewhat on the fence about the possibility of a future recession. For example, if a new order is placed for a Ford truck, it will go into production at the Ford factory and won’t be completed for some time. In that way it provides an insight into the level of economic activity that can be expected in the future. One of the key aspects of the durable goods orders report is that it is based on new orders that have been placed, not production that has already occured.

July 2023

The advance international trade deficit in goods increased to $91.2 billion in July from $88.8 billion in June as imports increased more than exports. Total construction activity for July 2023 ($1,972.6 billion) was 0.7 percent (+/-0.5 percent) above the revised June 2023 ($1,958.9 billion). Data out of the US pointed to a further build-up of pro-inflationary risks from https://1investing.in/ the labour market, giving the Dollar a fresh boost intraday.Fresh data showed weekly jobless claims fell to 230K, down… Households have also shifted their spending more toward services such as recreation and away from goods like consumer electronics. One of the strategies to really consider right now is how to protect your portfolio against the effects of inflation.

If a large order for some of these items comes through one month, it can skew the month-to-month results. For that reason, many analysts will look at durable goods orders, excluding the defense and transportation sectors. Month-on-month, however, and retail prices for food at home are on the decline.

The advanced reported core durable goods orders for July 2023 slightly increased to $187.2 billion. Durable goods orders data can often be volatile and revisions are not uncommon, so investors and analysts typically use several months of averages instead of relying too heavily on the data of a single month. Coupled with fears of a global financial crisis triggered by recent concerns about the health of the banking sector and the U.S. economic outlook is somewhat grim. Headline orders, which include transportation, sank by 5.2% last month, the government said Thursday. The rental vacancy rate in the second quarter 2023, 6.3 percent, was higher than the rate in the second quarter 2022.

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Higher borrowing costs typically stunt the economy and discourage businesses from hiring, spending and investing. The U.S. Census Bureau is committed to providing high quality data in a prompt and efficient manner to our customers. Automated retrieval programs (commonly called “robots” or “bots”) have caused delays that can negatively impact other customers’ timely access to information.

Because investment prices react to economic growth, it is important for investors to be able to recognize trends in the growth of the economy. Orders for factory hard goods, for example, can provide information on how busy factories may be in the future. Orders placed in one month may provide work in factories for many months in the future as they work to complete the orders. Capital goods excluding defense orders include machinery and equipment used in everyday business. It removes the effects of large orders for defense, commercial aircraft, and automobiles.

Prices from December to January increased by 0.4% and 0.3% from January to February. The Producer Price Index, a reflection of prices at the wholesale level, declined 0.1% in February. At the retail level prices remain elevated, with grocery bills up 10.2% over the 12-month period ending in February. Market turmoil is keeping a lid on retail gasoline prices, though that too could lead to more consumer spending given the extra discretionary cash on hand.

Some areas, such as military spending, are less likely to be impacted, but any company that relies on retail consumers will probably be worried. The potential for a slowdown in economic growth is likely to be a major concern for companies who manufacture durable goods. By definition, these items tend to be expensive purchases that are made infrequently. Removing average inventory meaning the volatile transportation sector to get to the core durables goods orders, there was still an increase but it was a more modest 0.5%. The durable goods sector is made up of companies that manufacture items with an expected lifespan of over three years. The sector is generally made up of complex goods that are expensive and require many parts to manufacture.

Durable goods orders give a thorough understanding of the manufacturing sector, which is a major sector of the economy. Orders and shipments of durable goods are reported by the Census Bureau monthly. It means that businesses and consumers are expecting the economy to improve when these orders increase. It also means that you have a better chance of successfully asking for a raise or having better returns on your stocks and mutual funds. Note that transportation goods are not included in core durable goods as the high value of aircraft and other transportation equipment can skew the monthly numbers and make it difficult to ascertain the underlying trend. For that reason, many analysts will look at core durable goods orders rather than total durable goods orders.

How the Durable Goods Orders Report Predicts the Future

Our AI will rebalance your investments on a weekly basis to optimize performance. All you have to do is build a portfolio of Kits and leave the rest of portfolio management to AI. The report for this month showed the major factor for the positive result was an 81% increase in orders for military aircraft and parts, compared to a 2.1% fall in orders for civilian aircraft. New car’s added 1.5% to the overall figure, while computers and related products chipped in 5.9%. Some examples of items that fall into this category include cars, planes, computers, appliances like refrigerators and TV’s, as well as industrial machinery and even tanks. It helps to look at the capital goods orders report without defense and transportation for this reason.

Excluding the pullback in orders for transportation equipment, durable goods orders rose by 0.5 percent in July after inching up by 0.2 percent in June. Economists had expected durable goods orders to slump by 4.0 percent compared to the 4.6 percent jump that had been reported for the previous month. For example, several American manufacturers source raw materials from China or assemble their products there. The imposition of tariffs or even the threat of such a measure can have a psychological effect on businesses and lead to lower spending.