Durable Goods

Posted by Scriptaty | 9:08 PM

What it is: The current demand (new orders) and supply (shipments) balances in the economy.

Who puts it out: U.S. Census Bureau (www.census.gov).

When it’s released: 8:30 a.m. EST around the 26th of the month after the actual month.

What it means: The durable goods number is another volatile indicator. It measures the demand for, and supply of, domestic products with an expected life length of at least one year, including both “intermediate” goods (for instance, building materials) and finished goods (cars, computer equipment, etc.). The report monitors the rate of growth within several large industry sectors, such as auto and electronics.

If demand is higher than supply it might indicate a new period of economic growth is around the corner. However, if demand stays above supply while unemployment is low, it also might indicate higher inflation ahead, as the industry will meet the demand with higher prices rather than increased production. This is most likely to occur at the end of a bull market and at the peak of the business cycle.