U.S. Factory Orders Data Remains Unchanged in August
New data from the US census bureau have revealed that the US factory orders in August remain unchanged... To be more precise, the factory orders say a decline of around $100 million ($0.1 billion) with the final value of around $548.4 billion.
The general market consensus was an increase of around 0.3% in the U.S. market orders. However, the actual data was a minor decrease in the market orders and has thus set the market sentiment negative. The data for July revealed a contraction of around 1%, and if we compare that with August, it seems that the rate of contraction has slowed down.
But we can't discount the fact that it has been two months in a row since the data for US factory orders is down! When we look at the US factory orders data reading in contrast with the economic condition in the country, it all starts to make sense.
After the data release, the general sell-off in the US dollar continued, and the dollar index lost around 0.9% of its value and closed around 110.67.
While the general market was forecasting an increase in factory orders, some experts were expecting the data to remain unchanged, and that was the case as well.
Economic Recovery Is Slowing Down
A key factor that is causing negative readings in the factory sector is the slowdown of the economic recovery in the USA. During the pandemic, Fed pumped billions of dollars into the economy, which sparked consumer spending and ultimately helped the factory sector as well.
Now that the Fed is tightening its policy and trying to reduce the demand, it has started to hurt the factory sector as well!
If we look at the nondurable goods orders for the month, it actually saw an increase of 0.2%. As for the capital goods of non-defense nature, it saw an increase of around 1.4% during August.