US durable goods orders beat forecasts

But consumer confidence data appears less resilient ahead of November election.

26 March 2024

There was a little bit of noise in today’s economic releases in the US. Durable goods orders came in ahead of expectations with an increase of 1.4%, against forecasts of a 1.2% advance. These measure “hard” products with a life expectancy of more than three years and are a leading indicator of production as rising purchase orders signal that manufacturers will boost activity in order to fill these orders, hence it has some prognostic significance to the overall demand of bigger-ticket, heavier items. The problem is some of this heavier demand is volatile and not recurring at the same frequency as the monthly data prints – think of airplanes; these are not something ordered month-to-month. Stripping out transportation orders and you get a better core reading and this advanced 0.5% over the month, again ahead of forecast at 0.4%.

Separately we had the consumer confidence for March, which fell to a level of 104.7 versus the previous month’s reading of 104.8. Hardly statistically significant you would argue but the measure was expected to be higher at closer to 107, so perhaps US consumers are much less optimistic than the markets give them credit for. It seems that the oncoming train wreck of the US election is perhaps beginning to cloud people’s hopes and dreams.