Orders for long-lasting factory goods increased in December for the eighth straight month, according to U.S. Department of Commerce data released on Wednesday. New orders for durable goods rose 0.2% to a seasonally adjusted $245.3 billion in December, following an upwardly revised 1.2% gain (previously 1%) in November.
Economists surveyed by The Wall Street Journal expected new orders to increase 0.8% in December. New orders for nondefense capital goods excluding aircraft and parts, a closely watched proxy for business investment, increased 0.6% to $71.8 billion following an upwardly revised 1% (previously 0.5%) November reading.
New orders for transportation equipment declined last month, falling 1%, as orders for commercial aircraft and parts were still heavily affected by the challenges at Boeing. In spite of this trend, stripping out transportation, core orders rose by a solid 0.7%, and orders and shipments are now back above pre-pandemic levels. In addition, the continued strength of new orders surveys suggests that demand will remain robust in the near term.
December’s increase in durable goods orders follows recent data from IHS Markit’s Flash U.S. Manufacturing Purchasing Managers’ Index, which also noted quicker expansions in output and new orders, with output growth accelerating in January to the second-fastest pace in almost six years.
Both surveys suggest that the robust recovery in the manufacturing sector remains on track, supported by domestic spending, which has been boosted by U.S. government stimulus, as well as by the continued global manufacturing upturn, led by China.
Overview of U.S. durable goods orders
Data on orders of durable goods, released on a monthly basis by the U.S. Census Bureau, measures the cost of orders received by manufacturers for durable goods. Those products are planned to last for three years or more, such as motor vehicles, household goods or medical equipment. Because those durable products often involve significant investments across large supply chains, they can reflect the broader state of the U.S. economy.
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