Rate measuring the percent of industrial output currently in use. A change in the rate indicates a change in the direction of economic activity. A higher percentage indicates a stronger manufacturing sector and an expanding economy, which can be inflationary. Components include energy, food and beverages, housing, apparel, transportation, medical care and entertainment. When the consumer price index goes up, it is a sign of an inflationary environment.
Consumers have to pay more for the same amount of goods and services.
Durable goods include those manufactured items with a normal life expectancy of three years or longer. An increase in the amount of durable goods orders may indicate an expansion in the economy and, if inflationary, the Federal Reserve could choose to tighten money by raising interest rates. An increase in the factory order total may indicate an expansion in the economy and could be an inflationary factor. The Federal Reserve feels that the economy is not growing at the desired level and eases credit conditions by lowering interest rates to help stimulate the economy. The broadest measure of the nation's production.