U.S. Commerce Jan Durable Goods Orders +3.4%; Consensus +1.0%
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
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
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 email@example.com
(END) Dow Jones Newswires
February 25, 2021 09:26 ET (14:26 GMT)
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