U.S Durable goods orders decline by 0.2% in January versus a much greater 1.5% drop expected

on Mar 1, 2020
Updated: Mar 11, 2020
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  • U.S Durable goods orders decline by 0.2% in January versus a 1.5% drop expected.
  • U.S core durable goods orders gain 0.9% in January versus a 0.2% increase expected.
  • Orders for civilian aircraft rose 346.2% in January while military aircraft orders declined 19.6%.

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The U.S Census Bureau released its report on durable goods orders last Thursday. As per the data, the U.S factories reported a decline in orders for manufactured goods in January. Much of the drop, as per the Bureau, was attributed to the falling demand for auto parts, cars, and military aircraft.

The Commerce Department announced a 0.2% decline in durable goods orders in January that came out significantly lower as compared to a 2.9% increase in the previous month (December). Excluding transportation orders known for volatility, the so-called core durable goods orders saw a 0.9% increase in January that marked its best reading since April 2018.

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Analysts Estimates For The U.S Durable Goods Orders In January

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Economists, on the other hand, had expected a much wider drop of 1.5% in durable goods orders in January. In terms of core durable goods orders, they had anticipated a small 0.2% gain last month. Thursday’s data also announced a 2.3% decline in durable goods orders as compared to last year while excluding transportation, the index was marked flat.

Industries in the United States were massively hit due to the ongoing trade war with China and the global economic slowdown. The uncertainty in the global economic scenario is currently more prominent ascribed to the recent outbreak of Coronavirus in China and its fast spread across borders.

In the previous months, the aforementioned data for the U.S has faced unusual volatility as the country’s largest airplane manufacturer, the Boeing Company, announced to temporarily halt production of its world-popular, fuel-efficient, 737 MAX airliner that remains grounded since March 2019 following two fatal crashes that killed 346 people in total within a short period of five months.

Orders For Civilian Aircraft Rose 346.2% In January

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In January, however, civilian aircraft orders rose sharply by 346.2% versus a 66.7% drop recorded in December.

Military aircraft orders, on the other hand, declined 19.6% in January. The cars and auto parts sector reported a 0.8% decline last month. Excluding military goods orders, the overall figure surged 3.6% in January to a level that was last seen in June 2017.

Computers orders gained 8% last month while a 2.1% growth was noted in machinery orders.

Nondefense capital goods orders (excluding aircraft) printed a 1.1% increase last month versus a significant drop announced in December. The aforementioned category serves as a reliable measure to trail business investment.

The EUR/USD currency pair closed the last week above the crucial 1.10 level at 1.1021 that suggests prospect for further upside in the upcoming month.

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