U.S. Durable Goods Orders Rose in December
January 28 2020 - 9:00AM
Dow Jones News
By Amara Omeokwe and David Harrison
WASHINGTON--Demand for long-lasting factory goods rose in
December, the Commerce Department reported Tuesday. The increase
was driven by a sharp rise in defense spending during a month when
Congress passed funding bills that included a boost in military
spending, and the report broadly was the latest sign the U.S.
manufacturing industry remains on uneven footing.
Orders for durable goods-products designed to last at least
three years-rose 2.4% in December from the previous month.
Economists surveyed by The Wall Street Journal expected a 0.3%
decrease.
Demand for military equipment surged after a steep decline in
November, with orders for defense capital goods up 90.2% on the
month.
New orders for transportation equipment were up 7.6%, boosted by
a 168% jump in orders for defense aircraft. Meanwhile, orders for
nondefense aircraft fell sharply, likely reflecting the continued
fallout from the grounding of Boeing's 737 MAX plane. Excluding
transportation, a category that can be volatile, orders were down
0.1%. Excluding defense, orders fell even further in December, by
2.5%.
Orders in November were down 3.1%, a bigger decline than
previously estimated.
New orders for nondefense capital goods excluding aircraft-or
so-called core capital goods orders, a closely watched proxy for
business investment-decreased 0.9% in December from the previous
month, to $68.6 billion. New orders overall decreased 1.5% for all
of 2019 compared to 2018, with core orders up 0.8% on the year.
Another reading on U.S. business investment, along with a broad
measure of the country's economic output, will come Thursday when
the Commerce Department releases its first estimates of gross
domestic product for 2019's fourth quarter and full year.
The rise in durable goods orders last month came amid
developments that could bode well for U.S. manufacturing. In
addition to Congress' passage of its spending package, U.S. and
China officials agreed to the first phase of a trade deal, which
was signed into effect on Jan. 15. The deal marked an easing in a
trade dispute between the two countries that weighed on the global
manufacturing industry for much of 2019.
Still, recent data have painted a mixed picture of the U.S.
manufacturing industry. The Federal Reserve reported earlier this
month that factory output increased 0.2% in December from November,
but a recent survey of purchasing managers from data firm IHS
Markit indicated manufacturing activity has slowed during January
compared to December.
(END) Dow Jones Newswires
January 28, 2020 08:45 ET (13:45 GMT)
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