USD Core Durable Goods Orders m/m, Oct 25, 2024

Core Durable Goods Orders m/m: A Glimpse into Manufacturing Activity

The latest release of Core Durable Goods Orders m/m, published on October 25, 2024, revealed a modest 0.4% increase in new purchase orders for durable goods, excluding transportation items. This slight rise comes after a 0.5% increase in the previous month. However, the market had anticipated a -0.1% decline, making the actual figure a positive surprise. While the impact is considered medium, the data provides a valuable insight into the health of the manufacturing sector.

Why Traders Care:

Core Durable Goods Orders m/m serve as a leading indicator of future manufacturing activity. When purchase orders increase, it suggests that manufacturers are anticipating an uptick in demand and are preparing to ramp up production. This positive outlook can boost confidence in the overall economy, potentially leading to increased investment and job creation. Conversely, a decline in orders signals a potential slowdown in manufacturing activity, which could have a negative impact on economic growth.

Dissecting the Data:

The October 2024 data points to a slightly more optimistic outlook for the manufacturing sector compared to market expectations. While the 0.4% growth is relatively modest, it does indicate a continuation of the positive trend observed in recent months. The fact that the actual figure outpaced the forecast can be seen as a positive sign for the US dollar, as it suggests a stronger than anticipated manufacturing sector.

Important Considerations:

It is crucial to note that this data is subject to revision. The Census Bureau typically releases a revised version of the report, known as the Factory Orders report, about a week after the initial release. This revision often incorporates additional data and can lead to adjustments in the original figures.

Furthermore, the Core Durable Goods Orders m/m data excludes orders for aircraft. This is due to the volatility of aircraft orders, which can significantly distort the underlying trend in the data. By excluding aircraft orders, the Core data is considered a more reliable gauge of underlying trends in purchase orders.

The Big Picture:

While the 0.4% increase in Core Durable Goods Orders m/m suggests a continued positive trend in the manufacturing sector, it is important to consider this data within the context of broader economic conditions. Other economic indicators, such as inflation, consumer spending, and unemployment, also provide valuable insights into the overall health of the economy.

Looking Ahead:

The next release of Core Durable Goods Orders m/m is scheduled for November 27, 2024. Investors and traders will be closely monitoring this data to assess the continued trajectory of the manufacturing sector and its implications for the broader economy.

Key Takeaways:

• The October 25, 2024, release of Core Durable Goods Orders m/m showed a positive 0.4% growth, exceeding market forecasts.
• This data provides a leading indicator of manufacturing activity, with increases signaling potential economic growth and declines suggesting a slowdown.
• The exclusion of volatile aircraft orders makes the Core data a more reliable measure of purchase order trends.
• Future releases of this data, along with other economic indicators, will be closely watched by investors and traders to assess the overall health of the economy.