Talking Points:
- US Durable Goods came in less negative than expectations and previous data saw an upward revision.
- US GDP for third quarter was revised higher as personal consumption data rose.
- USD/JPY rose to a high for the day following the news.
November US Advance Durable Goods Orders came in above expectations, coming in at -4.6%, above the expectation of -4.8%. However, this is significantly below last month’s read of 4.6% which was revised up to 4.8%. The underlying data was better shown through Durable Goods ex Transportation, which rose 0.5% versus expectations of 0.2%, and last month’s was revised up to 0.9% from 0.8%.
Also out today were GDP updates. GDP for Q3 was revised higher, to 3.5% from 3.2%, as Personal Conumption Expenditures rose to 3.0% from the previous 2.8%. Initial Jobless Claims came in higher than expected, at 275k versus 257k expected and 254k last week.
While headline Durable Goods Orders shrank, ex-transportation shows a less skewed, core number. Today’s reports are still in line with belief on the strength of the US consumer, who has almost single-handedly maintained positive GDP readings in the three quarters of this year. Personal Consumption Expenditures, roughly 72% of GDP, grew by 4.2% in the second quarter as compared to headline Q2 GDP read of 1.1%. In Q3, GDP grew by 3.5%, helped along by a 3.0% growth in consumer spending. The US consumer is generally considered to be the engine of the US economy, and the continued strength of Durable Goods Orders (ex Transportation) data may push away fears of a slowing economy.
See the DailyFX economic calendar for Thursday, December 22, 2016
Chart 1: USD/JPY 1-minute Chart (December 22, 2016 Intraday)
In the immediate wake of the data, the US Dollar rose sharply against the Euro, reversed, and then rose again. USD/JPY rose to 117.851 from $117.664. Soon after, it reversed those gains and fell back to around 117.686 and then reversed again. By the time this report was written, the pair was trending back higher at around 117.845.
--- Written by Omar Habib, DailyFX Research
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