The Census Bureau reported that durable goods orders were up 4.6 percent in December, its strongest gains in three months. More importantly, this data indicates that durable goods orders have recovered from several months of weaknesses from August to November. Specifically, the December figures were boosted by strong sales of airplanes. New orders for defense and nondefense aircraft were up significantly, with transportation orders overall up 11.9 percent.
If you were to exclude transportation sales, new orders would have risen 1.3 percent. The other durable goods categories with monthly increases in December included communications equipment (up 5.7 percent), primary metals (up 3.6 percent), and fabricated metal products (up 1.2 percent). Sectors with reduced new orders for the month included computers and related products (down 0.5 percent) and electrical equipment and appliances (down 2.4 percent).
Moreover, so-called “core” capital goods – or nondefense capital goods excluding aircraft – was up just 0.2 percent. Part of this could be an adjustment from stronger gains in October and November.
Meanwhile, shipments of durable goods rose 1.3 percent, building on the 1.8 percent rise of November. There were increases in most of the durable goods categories, with the largest gains in computers and related products (up 6.7 percent), primary metals (up 4.2 percent), defense aircraft and parts (up 3.8 percent), and nondefense aircraft and parts (up 2.5 percent).
On a year-over-year basis, manufactured durable goods shipments were up 4.8 percent in 2012. This was well below the torrid paces of 10.6 percent and 9.4 percent in 2010 and 2011.
Chad Moutray is chief economist, National Association of Manufacturers.
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