58.9 F
London
Friday, May 24, 2024

Durable Goods Orders Increase, Possibility of Higher Inflation

Key Takeaways:

  • The report shows that durable goods orders rose by 2.6% month-over-month, above the consensus estimate of 2.5% and the previous month’s growth of 0.7%.
  • This high demand could potentially cause more persistent inflation. This data comes after housing data showed a significantly higher increase in new home sales yesterday.
  • The increased demand could put upward pressure on prices, especially if supply chains struggle to keep up with the rising demand.

Durable Goods Orders

The US Census Bureau released its latest durable goods orders, the data shows an increase from the previous period. The report shows that durable goods orders rose by 2.6% month-over-month, above the consensus estimate of 2.5% and the previous month’s growth of 0.7%.

Durable Goods Orders

However, this high demand could potentially cause more persistent inflation. This data comes after housing data showed a significantly higher increase in new home sales yesterday.

The March data also showed that durable goods orders, excluding defense spending, increased by 2.3% month-over-month, outpacing the consensus estimate of 1.2% and the previous month’s growth of 1.5%. This suggests that the increase in demand is broad-based and not solely driven by government defense spending.

However, when excluding transportation, which can be volatile due to large orders for aircraft and vehicles, durable goods orders rose by a more modest 0.2% month-over-month. This figure is slightly lower than the consensus estimate of 0.3% but still represents an improvement from the previous month’s growth of 0.1%.

The Federal Reserve and Inflation

The strong demand indicates that businesses are investing in equipment and consumers are confident enough to make large purchases, which bodes well for economic growth. But, the increased demand could put upward pressure on prices, especially if supply chains struggle to keep up with the rising demand.

The Federal Reserve has been monitoring inflation indicators and has already taken steps to curb rising prices by keeping high-interest rates. However, if the demand for durable goods continues to grow at a rapid pace, it could make it more challenging for the central bank to bring inflation under control without causing a significant slowdown in economic growth.

Lazarus
Lazarushttps://ljlnews.com
Publisher and editor of LJLNews. I am a Stock Market enthusiast, with an interest for politics. I hope you enjoy reading the articles! Contact me at: Lazaruslucas@ljlnews.com

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest Articles