The US Dollar has been surging higher in the last two months, as the FED is leaving the door open for more rate hikes, depending on the economic data. The data released this month has presented a positive outlook in the United States, indicating that the US economy is holding up well amid global volatility and a recession seems far.

The US consumer has been holding the economy together as it keeps spending the pandemic savings, however, yesterday we saw a round of negative figures, indicating that the US consumer might not be feeling too good. With interest rates at historic highs, consumer cash savings are shrinking in the United States.

The CB Consumer Confidence and New Home Sales were pretty soft yesterday, which indicated softer consumers. But, today’s durable goods showed a jump from July’s reading, which shows the opposite. The USD is climbing higher after today’s data, but it was climbing higher yesterday as well. 

Durable Goods Orders in the United States increased 0.2%, or $0.5 billion, to $284.7 billion in August, according to the US Census Bureau on Wednesday. This data follows a 5.6% drop (updated from 5.2%) in July and was better than the market’s projection of a 0.5% drop, while non-defense capital orders posted a decent 0.9% jump last month.    

US August 2023 Durable Goods Orders Report

• August durable goods orders +0.2% vs -0.5% expected
• July durable goods orders were -5.2%
• Non-defense capital goods orders ex-air +0.9% vs 0.0% expected
• Prior non-defense capital goods orders ex-air +0.1% (revised to -0.4%)
• Ex transport -0.7% vs +0.1% expected
• Ex defense -0.7% vs -5.5% prior
• Shipments +0.7%

The core orders number is a good one but the +0.9% reading is a bit of an illusion because of the 0.5 pp revision lower last month. Still, even if we strip that out, it’s well-above the consensus and adds to the evidence that the manufacturing recession is coming to an end.

USD/JPY Live Chart