The US Dollar has strengthened against the Pound and Euro after the latest Durable goods orders data beat economist expectations by 2%.
According to the U.S. Census Bureau, new orders for manufactured durable goods increased by $12.4 billion or 5.7% in February to $232.1 billion meaning that orders have increased in five of the past six months. February’s rise followed a 3.8% decline in January. Durable goods are manufactured items expected to last at least three years.
Excluding defence which has taken a spending knock due to imposed budget cuts, new orders increased by 4.5%. Transportation equipment, up two of the last three months, drove February’s increase from $13.3 billion to $74.4 billion and an increase of 21%. This was led by non-defence aircraft and parts, which increased by $9 billion.
The data highlighted one negative aspect, as orders for goods that signal business investment plans fell in February by their largest amount in seven months, although the decline followed a strong January and may prove to be a temporary setback.
Orders for core capital goods declined 2.7%. Demand weakened for machinery and communications equipment. The decline followed a 6.7% surge in January, the biggest one-month gain in nearly three years.
Tuesday also saw the release of the latest US consumer confidence data. Surprising many economists the data showed that confidence fell by a larger-than-expected margin in March falling from 68.0 in February to 59.6 in March.
The disappointing data hints that the US economy could be about to feel the impacts of cuts in government spending.
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