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US Durable Goods Orders Decline Sharply, Weekly Initial Unemployment Claims Drop

By:
James Hyerczyk

October's durable goods orders fell 5.4%, more than expected, while jobless claims dropped to 209,000, showing labor market strength."

US Durable Goods Orders Decline Sharply, Weekly Initial Unemployment Claims Drop

Highlights

  • Durable goods orders fall 5.4%, exceeding estimates.
  • Initial unemployment claims decrease to 209,000.
  • Transportation sector leads durable goods downturn.

US Durable Goods Report

The October 2022 Durable Goods Report revealed a significant decrease in new orders for manufactured durable goods, which fell by $16.0 billion or 5.4% to $279.4 billion. This decline, notable in three of the last four months, was steeper than the pre-report estimate of a 3.2% decrease. September had seen a 4.0% increase in orders.

Excluding transportation, new orders remained virtually unchanged, which indicates that the overall decrease was heavily influenced by the transportation sector. When excluding defense, new orders saw a 6.7% decrease. A notable drop in transportation equipment orders, down 14.8% to $92.1 billion, was the primary driver of this overall decline.

Weekly Initial Claims Report

The Weekly Initial Claims Report for the week ending November 18 showed a decrease in seasonally adjusted initial claims to 209,000, down 24,000 from the previous week’s revised level. This figure was below the pre-report estimate of 226,000 new claims. The previous week’s level was revised up slightly from 231,000 to 233,000. The 4-week moving average, a more stable measure, decreased marginally to 220,000, reflecting a general downward trend in initial claims.

The seasonally adjusted insured unemployment rate held steady at 1.2% for the week ending November 11. The number of seasonally adjusted insured unemployment during the same week decreased to 1,840,000, a drop of 22,000 from the previous week’s revised level. However, the 4-week moving average for insured unemployment rose to 1,836,750, marking the highest level since December 18, 2021.

In summary, while the durable goods sector experienced a significant downturn, mainly driven by decreases in transportation equipment orders, the labor market showed signs of resilience with a decrease in initial unemployment claims. These contrasting trends highlight the complex and multifaceted nature of the current economic landscape.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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