According to our analysis USDJPY and EURUSD moved 20 pips on US Durable Goods Orders and US Gross Domestic Product (GDP) data on 26 October 2023.

USDJPY (9 pips)

EURUSD (11 pips)

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U.S. Economy Shows Mixed Signals in Latest Reports

In a snapshot of the U.S. economy's performance, two recent releases by the U.S. Census Bureau and the Bureau of Economic Analysis provide valuable insights into the state of the nation's economic affairs. These reports, released simultaneously on October 26, 2023, reveal a complex economic landscape marked by ups and downs. Let's delve into the key findings from both reports to gain a better understanding of the current economic situation.

1. Advance Estimate of Gross Domestic Product (GDP) for Q3 2023

The Bureau of Economic Analysis (BEA) released its "advance" estimate of the Gross Domestic Product for the third quarter of 2023, and it offers a mixed bag of economic indicators.

Positive Highlights:

  • GDP Growth: Real GDP increased at an annual rate of 4.9 percent in the third quarter, marking a significant acceleration from the 2.1 percent growth seen in the previous quarter.

  • Consumer Spending: The increase in GDP was driven by substantial growth in consumer spending, particularly in services and goods. Housing and utilities, healthcare, financial services, and food services were among the leading contributors to this increase.

  • Exports and Government Spending: Exports, state and local government spending, and federal government spending all contributed positively to GDP growth.

Concerning Points:

  • Nonresidential Fixed Investment: There was a notable downturn in nonresidential fixed investment.

  • Disposable Personal Income: While current-dollar personal income increased, disposable personal income saw a 1.0 percent decrease, contrasting the growth observed in the previous quarter.

  • Personal Saving Rate: The personal saving rate decreased from 5.2 percent to 3.8 percent, indicating that consumers may be saving less.

2. Durable Goods Manufacturers' Shipments, Inventories, and Orders for September 2023

The U.S. Census Bureau's report on durable goods manufacturers' shipments, inventories, and orders for September 2023 provides further insights into economic trends.

Notable Findings:

  • New Orders Increase: New orders for manufactured durable goods increased by $13.2 billion, a 4.7 percent rise, reaching $297.2 billion. This comes after two consecutive monthly decreases.

  • Transportation Sector: A significant driver of this growth was the transportation equipment sector, with orders increasing by $12.3 billion, or 12.7 percent.

  • Excluding Defense: Excluding defense-related orders, new orders surged by 5.8 percent, suggesting strength in non-defense sectors.

Conclusion:

These two simultaneous releases offer a multifaceted view of the U.S. economy. The advance estimate of GDP for Q3 2023 indicates robust economic growth, driven by increased consumer spending, exports, and government spending. However, there are concerns regarding nonresidential fixed investment and personal savings.

On the other hand, the durable goods manufacturers' report signals a rebound in new orders, primarily attributed to the transportation sector and non-defense-related orders.

It's essential to note that economic data is subject to revisions, and a more complete picture will emerge in the coming months. The mixed signals in these reports underscore the dynamic nature of the U.S. economy, where multiple factors contribute to its overall health. As we move forward, keeping a close eye on these economic indicators will be crucial for understanding the nation's economic trajectory.

Sources: https://www.bea.gov/news/2023/gross-domestic-product-third-quarter-2023-advance-estimate, https://www.census.gov/manufacturing/m3/adv/current/index.html

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