Demand for aircraft bumped U.S. durable goods orders up in December
In this Monday, Sept. 10, 2012 photo, dryers are seen from the inside of another clothes' dryer, foreground, at a Lowe's store location, in Framingham, Mass. (AP Photo/Steven Senne)
Published Monday, January 28, 2013 11:37AM EST
WASHINGTON -- U.S. orders for long-lasting manufactured goods rose sharply in December from November, helped by a strong gain in aircraft demand. But companies slowed orders for computers and other goods that signal investment plans.
The Commerce Department said Monday that orders for durable goods increased 4.6 per cent in December. The increase was driven by a 10 per cent gain in aircraft orders.
Still, demand for core capital goods, which indicates business investment plans, rose just 0.2 per cent. That followed two straight monthly gains of 3 per cent.
Orders for durable goods, which are expected to last at least three years, can be volatile from month to month.
Slower growth in business orders for long-lasting goods has hurt manufacturing, which struggled to gain momentum in 2012. While orders for durable goods rebounded in the final months of last year, economists expect the overall trend to stay weak this year.
"The strength in durable goods orders for December is a most welcome development," said Dan Greenhaus, an analyst at BTIG. "Going forward though, despite the better numbers, we still expect business investment ... to slow yet again in 2013. This is a trend that remains in place given the weaker demand environment."
The economy grew at an annual rate of 3.1 per cent in the April-June quarter. The government will provide its first look at overall economic growth in the October-December quarter on Wednesday. Many analysts believe growth slowed in the final three months of last year to less than 2 per cent.