By John McCormick 

Demand for long-lasting manufactured goods jumped in January, as the U.S. economic recovery gained momentum at the start of the year.

New orders for durable goods -- products designed to last at least three years, such as computers and machinery -- increased 3.4% to a seasonally adjusted $256.6 billion in January compared with December, the Commerce Department said Thursday.

It was the ninth straight month of gains and the largest percentage increase since July 2020. Economists surveyed by The Wall Street Journal expected a 1% gain, after an upwardly revised 1.2% increase the previous month.

New orders for nondefense capital goods excluding aircraft -- or so-called core capital-goods orders, a closely watched proxy for business investment -- increased 0.5% in January from the previous month, to $72.9 billion. The gain was smaller than in recent months.

Excluding transportation, a category that can be particularly volatile, overall durable-goods orders increased 1.4% in January, down from a 1.7% gain in December.

The gains were pronounced in aircraft orders. New orders for defense aircraft and parts rose 63.5% in January after a drop of 1% the previous month. New orders for nondefense aircraft and parts shot up by 389.9% after a 56.7% decline the month before.

"The manufacturing sector has rebounded strongly in recent months, making it a bright spot in the economy, even as we continue to hear about supply chain and workforce challenges," said Chad Moutray, chief economist for the National Association of Manufacturers. "Core capital goods orders and shipments have hit record highs in recent months, a sign to me that the sector continues to ramp up solidly as the economy recovers."

At the same time, Mr. Moutray noted that the manufacturing sector remains below pre-pandemic levels of production, with 575,000 fewer workers now than a year ago. "There is significant progress, but also still more work to do for a full economic recovery," he said.

Consumer spending, boosted in part by financial aid from the U.S. government, has been geared toward goods in recent months as some workers staying home more have purchased items such as furniture and technology devices.

Many U.S. manufacturers cut workers and preserved cash during the initial months of the coronavirus pandemic, which began roughly a year ago. That left some unprepared for a rebound in consumer demand for certain products.

Consumer confidence in the U.S. rose in February for the second consecutive month as Americans grew more upbeat about current business and labor market conditions, the Conference Board reported Tuesday. Still, the U.S. has about 10 million fewer payroll jobs than in February 2020.

Write to John McCormick at mccormick.john@wsj.com

(END) Dow Jones Newswires

February 25, 2021 09:26 ET (14:26 GMT)

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