US Durable goods orders fell sharply in March, by much more than forecast, declining by the most in three years. This signals that factory activity in the US economy lost momentum as the first quarter ended.
US durable goods are declined as goods that last more than three years. According to official data, orders fell 4.2% in March, lower than the expected drop of 1.5 percent. Meanwhile, February’s number was revised to show a lower number of a 1.9 percent increase compared to an original reading of a 2.4 percent gain.
The decline in orders for durable goods was mainly concentrated in the airline sector, as bookings for commercial jets fell. However, there was also a decline in other categories.
The data comes just before a key meeting by Federal Reserve policy makers who are due to announce interest rates later today. Expectations are for the Fed to maintain ultra low rates for a longer period of time, well into 2013 and even 2014.
The dollar fell sharply against the yen after the durable goods report, dropping 14 pips within a minute to 81.10 yen before recovering to prior levels. USDJPY is currently trading at 81.30.