Durable goods orders

Release Date: Usually released monthly, about 26 days after the month under review ends
Release Time: At 11am US Eastern Time
Released By: The US Census Bureau


The Durable Goods report is a monthly report released by the US Census Bureau. The report is usually revised in the Factory Orders report released about a week later. Two versions of the news release exist. Of these, the Core Durable goods report is the one that investors pay more attention to. It measures the change in the total value of new buying orders placed with manufacturers for durable goods with transportation items, not included. These transport items are seen to be too volatile and so are not included so as not to skew the results unduly.

Durable goods are hard products that have a life expectancy of more than 3 years, such as automobiles, computers, appliances, and airplanes.

Time of Release

The Core Durable Goods report is usually released monthly, about 26 days after the month under review ends. The time of release is 11am US Eastern Time. The data is released on webpage of the US Census Bureau and also on independent news feeds from Bloomberg and Thomas Reuters.

Interpreting the Data

The Core Durable Goods report is a high impact news event which can be traded as a news trade. An increase in the production of Core Durable Goods is a sign of improving and increasing manufacturing activity. This leads to improved revenues, more job security, more hirings, and an economic boom. These are all USD positive scenario. The pathway is stated below:

Production –> Expansion Rebound in Hiring –> Consumer spending, which accounts for almost 70 percent of the economy.

When production of Core Durable Goods drops, companies would reduce their production, and they would need to lay off redundant staff. This is a USD negative scenario.

It is therefore a tradable indicator as well as a leading indicator for manufacturing data.

Conclusion

The Core Durable Goods order is also released at the same time as the US Unemployment Claims, which is another high impact news event. As such, traders must be very aware of a conflict of the news. Conflict here is defined as two news releases which have opposite effects on the currency.