US durable goods orders surge in November on aircraft
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ORDERS for long-lasting US manufactured goods surged in November, boosted by aircraft bookings, but business spending on equipment appeared lacklustre amid higher borrowing costs.
The Commerce Department’s Census Bureau said on Friday (Dec 22) that orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, jumped 5.4 per cent last month. Data for October was revised higher to show orders falling 5.1 per cent instead of 5.4 per cent as previously reported.
Economists polled by Reuters had forecast durable goods orders rebounding 2.2 per cent. Orders increased 4.5 per cent on a year-over-year basis in November.
Manufacturing, which accounts for 10.3 per cent of the economy, continues to be hamstrung by higher interest rates. Despite an easing in financial conditions and prospects of rate cuts next year, activity is likely to remain tepid amid signs that businesses are throttling back on inventory accumulation in anticipation of softer demand.
Transportation equipment orders rebounded 15.3 per cent last month after declining 13.4 per cent in October. Motor vehicle and parts orders rebounded 2.8 per cent as strikes by the United Auto Workers ended.
Civilian aircraft orders soared 80.1 per cent. Boeing reported on its website that it had received 114 orders for civilian aircraft, 90 of them the more expensive 777X series. That compared to 123 orders in October.
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There were increases in orders for electrical equipment, appliances and components, primary metals, machinery as well as computers and electronic products.
Non-defence capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rebounded 0.8 per cent after a downwardly revised 0.6 per cent drop in the prior month. These so-called core capital goods orders were previously reported to have declined 0.3 per cent in October.
Core capital goods shipments dipped 0.1 per cent for a second straight month. Shipments of non-defence capital goods increased 0.5 per cent following a 0.3 per cent drop in the prior month.
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These shipments feed into the calculation of equipment spending in the gross domestic product report. Business spending on equipment spending contracted in the third quarter. The economy grew at a 4.9 per cent annualised rate last quarter. REUTERS
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