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Market Wire - Durable Goods Orders Weaken, Jobless Claims Fall to Post-1969 Low

CalendarMarch 24, 2022
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Karl Schamotta, Chief Market Strategist, karl.schamotta@corpay.com

Durable goods orders and capital investment slowed more than expected last month, suggesting that the war in Ukraine and tightening Federal Reserve policy may be having a slight chilling effect on the US economy. Data from the Census Bureau indicated that new orders for manufactured goods meant to last more than three years decreased $6 billion or 2.2 percent to $271.5 billion in February. Shipments were down $0.1 billion to $270.6 billion, and unfilled orders increased for the 13th consecutive month, up 0.4 percent to $1,288.4 billion.

Transportation, up in the three previous months, led the decrease, with orders for motor vehicles and parts slumping 0.5 percent, while commercial aircraft tumbled 30 percent. A drop in orders at Boeing - from 77 aircraft in January to 37 in February - likely played a significant role.

Core capital goods orders - for non-defence capital goods excluding aircraft - slid 0.3 percent month-over-month after an upwardly revised 1.3 percent gain in January.

But the labor market remained incredibly robust. A separate report showed the number of Americans filing new claims for unemployment benefits dropped last week to 187,000, down from 215,000 in the previous week - and the lowest since 1969.

According to data released by the Department of Labor this morning, the 4-week moving average – used to smooth out weekly volatility and discern longer-term trends – fell to 211,800.

Treasury yields ratcheted slightly higher in the minutes after the two releases, putting more lift under the dollar. West Texas Intermediate prices are holding near $115 a barrel, but trading in currency markets remains relatively cautious, with commodity-linked currencies seeing limited gains.

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