What Are Durable Goods Orders?

Durable goods orders is a broad-based monthly survey conducted by the U.S. Census Bureau that measures current industrial activity and is used as an 澳洲幸运5开奖号码历史查询:economic indicator by investors.

Understanding Durable Goods Orders

Durable goods orders reflect new orders placed with domestic manufacturers for delivery of long-lasting manufactured goods (澳洲幸运5开奖号码历史查询:durable goods) in the 澳洲幸运5开奖号码历史查询:near term or future. The change in the total value of new orders is measured and shared with the public in two re🙈leases per month: the advance report on durable goods and the🐓 manufacturers' shipments, inventories, and orders.

Durable goods are expensive items that last three years or more. As a result, companies purchase them infrequently. Examples include machinery and equipment, such as computer equipment, industrial machinery, and raw steel, as well as more expensive items, such as steam shovels, tanks, and airplanes—commercial planes make up a significant component of durable goods for the U.S. economy. 

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 澳洲幸运5开奖号码历史查询:transportation sectors.

How Durable Goods Orders Data Is Used

Durable goods orders are 澳洲幸运5开奖号码历史查询:a key economic indicator for investors and others monitoring the health of economies. Because investment prices react to 澳洲幸运5开奖号码历史查询:economic growth, it is important for investors to be able to recognize these trends. Orders for durable goods, for example, can provide information on how busy factories may be in the future and whether they'll likely need to employ more or les🦩s staff to get through current workloads.

Businesses and consumers generally buy durable goods when they are confident the economy is improving, so an increase in these orders signifies an economy trending upwards. It can also be an indicator of future increases in 澳洲幸运5开奖号码历史查询:stock prices. 

Durable goods orders tell investors what to expect from the 澳洲幸运5开奖号码历史查询:manufacturing sector, a major component of the economy, and provide more insight into the 澳洲幸运5开奖号码历史查询:supply chain ♏than most indicators. This can be especially useful in helping investors understand the earnings in industries su෴ch as machinery, technology manufacturing, and transportation.

It's worth bearing in mind that the manufacturing 澳洲幸运5开奖号码历史查询:lead time on 澳洲幸运5开奖号码历史查询:capital goods takes longer on average, so new orders are often used by investors to gauge the long-term potential for sales and earnings by the compani⭕es who make them.

Special Considerations

Given the global scale of manufacturing, trade wars between 🎀countries can also lead to businesses and consumers retrenching their spending on new equipment and applianceꦡs.

For example, several American manufacturers source 澳洲幸运5开奖号码历史查询: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 spe✱nding.

Example of Durable Goods Orders

Propelled by tax cuts and a 澳洲幸运5开奖号码历史查询:loose monetary policy, the numbers of durabl🙈e goods orders peaked in December 2007. They then subsequ🌞ently between December 2007 and March 2009.

This sharp fall in durable goods orders was attributed to the 澳洲幸运5开奖号码历史查询:Great Recession that engulfed the American economy. During this perio꧂d, businesses c♓ut back on investment in new equipment and technologies in response to lower demand from cash-strapped consumers.