The data released by the U.S. Census Bureau today, Thursday, revealed negative durable goods orders data for the month of July, as the durable goods orders index recorded a monthly contraction of 5.1%. This is the largest contraction in durable goods orders since May 2020, and is much worse than the expectations that indicated a contraction of only 4.1%. It is also worse than the previous reading, which showed growth of 4.4% in June.

At the same time, the core durable goods orders index reading was positive and better than expected, as the index recorded a growth of 0.5%, which is better than market expectations that indicated a growth of only about 0.2%. The previous reading of the index recorded a growth of 0.5% in June.

It is worth noting that this index measures the change in the total value of new purchase orders placed with manufacturers on a monthly basis. It is a leading indicator that reflects production and an increase in purchase orders and serves as a sign that manufacturers will ramp up their activity to meet those orders. At the same time, the durable goods index significantly impacts U.S. dollar trading; if the data comes in better than expected, it has a positive effect on the U.S. dollar, and vice versa.