Economic indicator - "Core durable goods orders"
If you trade the news and use a tool like an economic calendar , you've probably come across an indicator of the US economy called "Core Durable Goods Orders."
Moreover, the economic calendar indicates that it is a fairly significant factor and can influence the US stock and currency markets.
Therefore, we will try to understand what this index is and how its changes affect financial markets.
Core Durable Goods Orders is an economic statistic that measures the change in the total volume of new orders received by U.S. manufacturers for durable goods, excluding transportation.
Core durable goods orders are an important indicator for assessing the health of the US economy. They reflect demand for durable goods, which is an indicator of business activity.
An increase in core durable goods orders indicates an increase in business activity, while a decrease indicates a decline in demand.
How are Core Durable Goods Orders calculated?
Core Durable Goods Orders are calculated by the US Department of Commerce. This indicator is based on data on new orders received by US manufacturers from their customers. The data is collected monthly and published in the middle of the following month.
How does this indicator affect the dollar exchange rate?
The dollar exchange rate is a significant indicator. It influences the cost of imports and exports, as well as the cost of investment. Core durable goods orders are a factor influencing the dollar exchange rate.
Rising core durable goods orders indicate increased business activity in the US. This could lead to increased demand for the dollar from foreign investors looking to invest in the US economy. As a result, the dollar could appreciate.
A decline in core durable goods orders indicates a decline in business activity in the US. This leads to reduced demand for the dollar from foreign investors looking to invest in the US economy. As a result, the dollar exchange rate may weaken.
Examples of the indicator's impact on the dollar exchange rate
In 2022, core durable goods orders in the US grew by 1.7% year-on-year. This was driven by increased demand for durable goods such as furniture, appliances, and computers, which led to a stronger US dollar.
In 2023, core durable goods orders in the US declined by 5.1% year-on-year. This was due to the slowdown in the US economy and the Federal Reserve's interest rate hikes. The decline in core durable goods orders contributed to the depreciation of the US dollar.
When it comes to the stock market, the impact of Core Durable Goods Orders on the price of securities is similar to the impact on the price of the US currency.
Core durable goods orders are a major factor influencing the US stock market. An increase in core durable goods orders indicates increased business activity and rising demand. This leads to higher profits for companies producing durable goods, resulting in higher stock prices.
A decline in core durable goods orders indicates a decline in demand. This could lead to a decline in profits for companies producing these goods, leading to a decline in the price of these companies' shares.
In conclusion, it can be said that the growth of the Core Durable Goods Orders indicator is a positive factor for the American economy and has a positive effect on the US dollar exchange rate and the American stock market.
