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Home > Coronavirus > CHART OF THE DAY: U.S. durable goods orders rise for eighth straight month

CHART OF THE DAY: U.S. durable goods orders rise for eighth straight month

Jan. 27, 2021 by Jason Alexander

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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.

For more information on how the coronavirus pandemic is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.

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Filed Under: Coronavirus, Economics, Industrials Tagged With: coronavirus, Covid-19, durable goods

About Jason Alexander

@jaalex53

Jason assists clients in the industrial products, consumer products and financial services industries and has more than 15 years of experience serving large multinational clients with particular emphasis on SEC clients, Fortune 500 and middle market companies. Jason has previously advised clients in the areas of accounting, risk management, mergers and acquisitions, process design and improvement, internal audit, regulatory compliance, internal and external financial reporting and information technology system implementation. Strong record of accomplishment of people, team and practice development across North America, Europe, Latin America, Africa and Asia.

Jason is also on the Board of Directors of the RSM US Foundation and a member of RSM’s cutting edge Industry Eminence Program, which positions participants to understand, forecast and communicate economic, business and technology trends shaping the industries RSM serves.

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