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CONSUMER Need
Marketing activities
What is it?
Durable goods include those manufactured items with a normal life expectancy of three years or longer. An increase in the amount of durable goods orders may indicate an expansion in the economy and, if inflationary, the Federal Reserve could choose to tighten money by raising interest rates. Economic indicator that measures new orders placed with domestic manufacturers for immediate and future delivery of factory hard-goods. Levels of, and changes in, Durable Goods Orders are widely followed as an indicator of factory sector momentum.
Why is it important?
Center-stage attention by the financial markets and the business community the moment it is released. When a orders is a positive sign, they work to satisfy this demand from customer. When a orders is a negative sign: they will have to shut down some plants, possibly lay off workers, or risk unwanted inventories. Many economy sectors are tied to Durable Goods orders indictor: employment growth, industrial output, productivity, and profits.
Impact on Market
Latest Release
Durable Goods Orders: overview New orders for manufactured goods in March, up four of the last five months, increased $11.9 billion or 3.1 percent to $400.2 billion.
Shipments, up following two consecutive monthly decreases, increased $5.9 billion or 1.5 percent to $392.9 billion.
Unfilled orders, up twenty-two of the last twenty-three months, increased $12.9 billion or 1.8 percent to $717.3 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 1.1 percent February increase.
Inventories, up twelve of the last thirteen months, increased $1.0 billion or 0.2 percent to $484.0 billion. This followed a slight February increase.
Latest Release
Inventories Inventories of manufactured durable goods in March, up thirteen consecutive months, increased $0.6 billion or 0.2 percent to $298.5 billion, revised from the previously published 0.3 percent increase. This followed a 0.1 percent February increase. Inventories of manufactured nondurable goods, up following three consecutive monthly decreases, increased $0.3 billion or 0.2 percent to $185.5 billion. This was due to petroleum and coal products, which increased $0.6 billion or 2.0 percent to $28.0 billion.
Historical Data
Data Analysis
The capital goods orders appear to be around the corner. Inflation pressure is unlikely, especially when the negative trend on core capital goods is possible . Concerns about economic growth are somewhat released by the increase in capital goods orders reflecting strong business investment spending in March.
Nondurable goods last less than two years: Food, clothing, cigarettes, alcohol, but not personal computers!! The nondurable goods manufacturing index is an indicator of the economics of everyday life. The index has been published monthly by the US Federal Reserve Board since 1919. It complements the durable goods manufacturing index.
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