US durable goods orders show modest 0.2% December gain
January 27, 2021 by Martin Crutsinger, The Associated Press
WASHINGTON – Orders to U.S. factories for big-ticket manufactured goods rose a modest 0.2 per cent in December, held back by a big drop in the volatile aircraft sector. A key category that tracks business investment decisions slowed.
The rise in orders for durable goods, items expected to last at least three years, followed much stronger increases of 1.2 per cent in November and 1.8 per cent in October, the Commerce Department reported Wednesday.
Orders for commercial aircraft, hard hit because of the sharp drop in air travel during the pandemic fell 51.8 per cent in December. Separately, Boeing reported Wednesday that it lost $8.4 billion in the fourth quarter, capping a record loss for all of 2020.
A category that covers business investment plans rose 0.6 per cent following bigger gains of one per cent in November and 1.7 per cent in December.
Economists had expected total orders would post a stronger advance of around one per cent in December but noted that the overall gain was held back by the big drop in aircraft orders. Excluding transportation orders, total orders rose 0.7 per cent in December, and that followed a 0.8 per cent rise in November.
Even with the slowdown, total orders are close to their pre-pandemic levels. Orders for motor vehicles rose 1.4 per cent in December while demand for defence aircraft jumped five per cent.
“The manufacturing sector is fairing fairly well even as virus cases have surged,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “The December data are signalling still strong but slower growth in both business investment and equipment spending.”