US Durable Goods and GDP Preview: Spending returns to trend, GDP steady
|-
Durable goods expected to rebound sharply in November
-
Third quarter GDP to remain at 3.5%
-
Business spending predicted to turn positive
The US Census will release its November Report on Durable Goods-Manufacturers' Shipments, Inventories and Orders on Friday December 21st at 8:30 am EST, 13:30 GMT. The Bureau of Economic Analysis, a division of the Commerce Department, will issue its third and final revision of third quarter GDP at 8:30 am EST, 13:30 GMT
Prediction: Overall orders to recover from October's steep drop
New orders for durable goods are forecast to rise 1.6% in November as business levels out following October's 4.3% decline. The unusually large drop had been the indirect result of September's one time 119.1% increase in Defense Department aircraft purchases.
Durable goods are a volatile series. They encompass a wide range of manufactured products designed to last three years or more in use. Toasters, shoes, car and eyeglasses are counted but so are large industrial items like commercial and military aircraft. It is these that give the series drama in the months when manufacturers report large orders. In practice it is usually the airliner orders of Boeing Company of Chicago that provide the variation.
Orders outside of the transportation sector are forecast to advance 0.2% in November after October's 0.1% increase. This category has been falling short of analysts' expectation for six months. The average monthly prediction has been 0.45% and the average number has been but 0.1%.
Business investment: Back to the positive
Business spending represented by the accurate but rather long title of non-defense capital goods excluding aircraft, cap-ex for short, is forecast to rise 0.2% in November following one flat and two negative months. The declines in August and September came after four very strong months from April through July when this group averaged a 1.25% gain each month. This category is a closely watched proxy for business investment though it is not, like the retail sales control group, a line item in the government's GDP calculation.
GDP: Steady to a 3% year
The third and final revision to annualized third quarter GDP from the Commerce Department is expected to confirm that the US economy expanded at a 3.5% pace in the third quarter. The accounting for gross domestic product, the widest measure of a nation’s economic activity, is subject to two revisions at one month intervals following the initial release as additional data becomes available to the government statisticians.
If GDP performs as expected the US will have expanded at a 3.3% pace in the first three quarters, the best rate in 12 years.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.