Once a month, the U.S. Census Bureau gives us a glimpse into what the future demand for big ticket items is going to be by releasing its Durable Goods numbers. Traders love this information because consumers only buy durable goods when they are confident in the economy and in their ability to pay for the big-ticket items.

[VIDEO] Trading the Durable Goods Numbers

The more durable goods consumers are purchasing, the stronger the economy is and the higher stock prices will typically go.

The fewer durable goods consumers are purchasing, the weaker the economy is and the lower stock prices will typically go.

Of course, there are certainly other factors you should be looking at when determining consumer demand so  read the news wisely.

What is the Durable Goods Number?

The Durable Goods number reports the amount of purchase orders placed with manufacturers for durable goods. Durable goods are hard products—such as automobiles, computers and appliances—with a life expectancy of more than three years.

You can see the most recent Durable Goods report here.

Appliance Stocks to Watch

The Durable Goods number is especially important for shareholders in the nations largest appliance companies. When you see the Durable Goods number rising, it is a good sign for appliance companies and will typically have a positive impact on the price of their stocks. When you see the Durable Goods number falling, it is a bad sign for appliance companies and will typically have a negative impact on the price of their stocks.

Here are a few of the appliance companies you should keep an eye on:

• Whirlpool Corporation (NYSE: WHR)
• The Black & Decker Corporation (NYSE: BDK)
• Snap-on Incorporated (NYSE: SNA)
• Pentair, Inc. (NYSE: PNR)

Trading the Building Permits Number

Once a month, the U.S. Census Bureau gives us a glimpse into the future health of the housing market by releasing it Building Permits numbers. Traders love this information because the number of building permits issued impacts the building industry for months to come.

The more permits are issued, the more homes will be built, the more appliances and furniture will be purchased and the more construction workers will be employed.

[VIDEO] Trading the Building Permits Number

The fewer permits are issued, the fewer homes will be built, the fewer appliances and furniture will be purchased and the fewer construction workers will be employed.

What is the Building Permits Number?

The Building Permits number is an annualized number of all of the residential building permits that were issued during the previous month. In other words, the Census Bureau determines how many building permits were issued during the previous month and multiplies that number by 12

Now, the Census Bureau does not go around and add up every single permit that was issued across the United States to get this number. Instead, it conducts a sample survey and extrapolates the data from the survey. With that in mind, the Census Bureau states “It may take 3 months to establish an underlying trend for building permit authorizations.” So be wary of jumping the gun just because you see one good, or one bad, announcement.

You can see the most recent Building Permits report here.

Home Builder Stocks to Watch

The Building Permits number is especially important for shareholders in the nations largest home builders. When you see the Building Permits number rising, it is a good sign for home builders and will typically have a positive impact on the price of their stocks. When you see the Building Permits number falling, it is a bad sign for home builder and will typically have a negative impact on the price of their stocks.

Here are a few of the largest home builders you should keep an eye on:

• The Ryland Group, Inc. (NYSE: RYL)
• Meritage Homes Corporation (NYSE: MTH)
• Standard Pacific Corp. (NYSE: SPF)
• Hovnanian Enterprises, Inc. (NYSE: HOV)