New Orders for Durable Goods Drop 4.3%
New orders for durable goods fell 4.3% to $229.3 billion for December, according to a Commerce Department report (link opens as PDF) released today. The weakness was led by a big 17.5% drop in the volatile category of commercial aircraft.
After increasing a revised 2.6% for November, this latest report comes as an unpleasant surprise. Overall, analysts had predicted a 1.6% increase in new orders for December. Durable goods are items meant to last at least three years, and investors keep a close watch on new orders to gauge businesses' longer-term confidence in the economy. Some of the December weakness probably reflected a temporary dip following November's jump, which had been driven by businesses rushing to take advantage of expiring tax breaks.
Source: Census.gov.
Excluding volatile transportation orders (which include aircraft), December's numbers don't look much better. Analyst expectations called for a 0.7% rise, but actual new orders tapered off into the red with a 1.6% dip.
Orders for primary metals such as steel fell 2.1% while demand for computers and other electronic products dropped 7.8%. Orders for machinery rose 0.8%.
Despite the new orders decrease, unfilled orders continued to advance with a 0.4% increase, while inventories expanded 0.8% to $387.8 billion, the highest level since data were first recorded in 1992. After increasing 1.3% in November, shipments fell 1.9%.
-- Material from The Associated Press was used in this report.
The article New Orders for Durable Goods Drop 4.3% originally appeared on Fool.com.
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