Industrial Production and Durable Goods Orders

What these reports measure

Industrial production is the physical output of factories, mines and utilities (electricity and gas). In the United States, the Federal Reserve publishes it monthly together with capacity utilisation, the share of available production capacity that is in use. Most other major economies publish their own industrial output series through their statistics offices.

Durable goods orders count new orders placed with US manufacturers for goods meant to last several years, such as machinery, computers, vehicles and aircraft. The US Census Bureau publishes them monthly in an advance report, followed later by a fuller factory orders report that can revise the figures.

Both reports belong to the wider set of data described in fundamental analysis.

What they say about the cycle

Manufacturing is more sensitive to the business cycle than services. When demand slows, companies cut orders, then output, then jobs. When demand recovers, the same steps happen in the same sequence.

• Durable goods orders look forward. An order is placed today and the production happens later, so falling orders can signal weaker output ahead.
• Industrial production shows current activity. It feeds into estimates of GDP.
• Capacity utilisation links output to inflation. High utilisation can mean producers have less spare capacity, which can add to price pressure.

Together with PMI surveys, these reports help traders judge whether the manufacturing side of the economy is expanding or contracting. They are also used in recession indicators.

How to read the details

Durable goods orders

The headline figure moves a lot because aircraft orders are large and irregular. Traders usually look at:

• Orders excluding transportation, which removes aircraft and vehicles.
• Core capital goods orders (nondefence capital goods excluding aircraft), which are often used as a measure of business investment plans.
• Revisions to the previous month, which can change the picture as much as the new figure.

Industrial production

Look at the breakdown as well as the headline:

• Manufacturing is the core of the report.
• Utilities depend heavily on weather. A cold or hot month can lift output without saying much about the economy.
• Mining includes oil and gas extraction, so it moves with energy prices.

How markets typically react

Markets react to the difference between the actual figure and the consensus forecast, not to the figure alone. See economic surprises for how this works.

• Currencies: A stronger-than-expected report can support the US dollar if traders think it makes the Federal Reserve less likely to cut rates. A weaker report can have the opposite effect. The US Dollar Index shows the broad dollar move.
• Stock indices: Strong data can lift cyclical shares, but it can also push bond yields up and weigh on indices. See what moves indices.
• Size of the reaction: These reports usually move markets less than payrolls or inflation data. The reaction is often larger when the release comes close to a central bank meeting or when other data have been mixed.

A reaction can reverse within minutes, and a report can be overshadowed by other news released around the same time. Nothing here is a trade idea or a forecast.

Release dates and figures

Release dates come from official calendars: the Federal Reserve's release schedule for industrial production and the US Census Bureau's economic indicator calendar for durable goods orders. Take actual figures from those official sources, not from social media posts. Our economic calendar guide explains how to read consensus, previous and actual values.

Risk

Prices can jump and spreads can widen around data releases. Leveraged CFD and forex trading can lose money fast, including more than you planned if stop orders fill at worse prices. Read risk management before trading around news.

Frequent questions

What is the difference between industrial production and durable goods orders?

Industrial production measures what is being produced now. Durable goods orders measure new orders, which point to future production.

Why is the headline durable goods figure so volatile?

Large and irregular aircraft orders swing the total. Many traders watch the figure excluding transportation and the core capital goods figure instead.

Does durable goods data matter for forex?

It can move the US dollar when the result differs from expectations, mainly through what it suggests about growth and interest rates. The effect is usually smaller than for payrolls or inflation data.

Where do I find the release dates?

Check the Federal Reserve release schedule and the US Census Bureau calendar. An economic calendar collects these dates in one place.