• Durable Goods Orders expected to be on par in December at 0.9% from 1%.
  • Nondefense Capital Goods are forecast to be unchanged at 0.5%.
  • Retail Sales present a cautionary view, -1.4% in November, -0.7% in December.
  • Initial Jobless Claims and Nonfarm Payrolls have worsened since October.
  • Markets are unlikely to be moved having seen the weak December Retail Sales figures.

Americans pulled back on spending at the end of last year as layoffs accelerated and job losses returned. The slowdown in the labor market is predicted to be temporary as the economy pulls away from the pandemic in the next two quarters but consumers turned caution nonetheless, Retail Sales unexpectedly fell in November and December.

Durable Goods are consumer and business purchases that are designed to last three years or more in normal use. The tend to be optional, a new car, computer or display counter rather than food, gasoline or raw materials.

Have consumers decided to wait on their desires until the future is more secure?

Analysts polled by Reuters do not seem to think so. Durable Goods Orders are forecast to rise 0.9% in December after gaining a revised 1% in November. Orders ex-Transportation are projected to rise 0.5% following 0.4% prior. Nondefense Capital Goods Orders, the business investment proxy, are forecast to be unchanged at 0.5%.

Durable Goods

US labor market

The labor market began to deteriorate in the final two months of the year, largely under the impact of a stringent lockdown in California, the largest state economy, and partial closures in New York and elsewhere.

Initial Jobless claims in the first and last weeks of November were 711,000 and 716,000, the lowest of the pandemic. But the two middle weeks averaged 767,500, giving the month a run of 740,500. Even with weekly totals for half the month increasing sharply, November was still the seventh straight month of improvement and the average was 58,000 lower than October.

Initial Jobless Claims

Claims had similar brief increases in July and in August that were not precursors to a general rise in layoffs or a drop in hiring. At the end of November the direction of the labor market was still undecided.

That trend was determined in the first week of December when claims rose to 862,000 followed by 892,000, which was the highest seven-day total in two-and-a-half months. December's average jumped to 837,500, the highest in 12 weeks.

Nonfarm Payrolls reflected the deterioration in job markets. Payrolls dropped to 336,000 in November from an average of 660,500 in September and October.

In December the market lost 140,000 positions, the first negative month since April and a reversal on the 71,000 forecast.

Claims have continued at a much higher pace in January averaging 870,000 for the three weeks through January 15 and are projected to be 878,000 on January 22 due on Thursday.

With layoffs continuing at a higher level in January than December, the current 68,000 estimate for this month's payrolls, to be issued on February 5, seems optimistic.

Retail Sales

Consumer spending has also mirrored the declining fortunes of the job market.

From July to September sales rose an average of 1.03% per month. In October sales dipped to -0.1%. In the November and December holiday shopping months sales fell 1.4% and 0.7% respectively.

Retail Sales

Control Group Sales averaged 0.5% from July to September. They fell 0.1% in October, 1.1% in November and 1.9% in December.


The relatively optimistic assessments for Durable Goods have low odds of being fulfilled. Individuals and families can logically opt to wait for a secure recovery before buying that new bicycle or boat.

Business investment in the Nondefense category, may hold up as it is spending for execution in several months when a much better economic environment is anticipated.

For the markets Durable Goods Orders are old news, restating the information from Retail Sales for specific and smaller categories. No development is going to convince traders that the revival started in December.

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended Content

Recommended Content

Editors’ Picks

EUR/USD rises toward 0.9700 following earlier slump

EUR/USD rises toward 0.9700 following earlier slump

EUR/USD has managed to erase its daily losses and turned flat on the day slightly below 0.9700 in the European morning. Disappointing IFO sentiment data from Germany had little to no impact on the shared currency as investors keep a close eye on central bank speakers.


GBP/USD rebounds from all-time lows, eyes on BoE

GBP/USD rebounds from all-time lows, eyes on BoE

GBP/USD has recovered toward 1.0800 from the all-time low it touched below 1.0400 earlier in the day. GBP bears move to sidelines amid market speculations that the Bank of England could consider an emergency rate hike to stop the currency's depreciation.


Gold gains traction, trades above $1,640 Premium

Gold gains traction, trades above $1,640

After having dropped to its weakest level in over two years below $1,630 during the Asian trading hours, gold staged a rebound and advanced beyond $1,640. The benchmark 10-year US T-bond yield is up 2% on the day, not allowing XAU/USD to gather further bullish momentum.

Gold News

Cardano price could trap impatient investors before triggering an explosive move to $0.505

Cardano price could trap impatient investors before triggering an explosive move to $0.505

Cardano price shows a consolidation below a stable support level and has yet to reveal a directional bias. The ongoing range tightening will likely resolve as the US markets head to a fresh start this week.

Read more

Week Ahead: Euro eyes Italian elections and flash CPI, dollar may take a backseat

Week Ahead: Euro eyes Italian elections and flash CPI, dollar may take a backseat

With the Fed meeting out of the way, a quieter week is on the horizon, barring of course any flare up of tensions between Russia and Ukraine. Either way, the spotlight will probably fall on the euro as far-right parties are expected to gain ground in Italy’s parliamentary election on Sunday.

Read more