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US durable goods orders plunge in December

[WASHINGTON] Orders for US durable goods dropped broadly in December, led by a sharp fall in transportation equipment, signalling some persistent weakness in the manufacturing sector, government data released on Tuesday showed.

New orders for long-lasting manufactured goods fell 3.4 per cent from November to US$230.5 billion, the fourth decline in five months, the Commerce Department said.

The department revised November's decrease to 2.1 per cent from the prior estimate of 0.7 per cent.

In December, excluding the volatile transportation sector, new durable good orders fell 0.8 per cent. Excluding defence, they were down 3.2 per cent.

Almost all durable goods orders declined, except for motor vehicles and parts (+2.7 per cent), electrical equipment and appliances (+1.2 per cent) and fabricated metal products (+1.0 per cent).

Transportation equipment orders fell for the fourth time in five months, by 9.2 per cent.

New orders for capital goods, an indication of business investment, dropped 2.6 per cent.

Year-over-year, durable goods orders ended 2014 with a 6.2 per cent gain.

Jim O'Sullivan, chief US economist at High Frequency Economics, noted that stripping away the highly volatile aircraft and defence components, durable goods orders edged higher in December.

"However, core capex orders were weak again. While they are also quite volatile, the weakness in the last couple of months is somewhat concerning," he said.