Orders for Capital Goods Climb by Most Since June 2014
Natalie Behring/Bloomberg News
Orders for U.S. capital goods rebounded in January by the most since June 2014, representing a pause in manufacturing’s downturn.
Bookings for non-military equipment excluding commercial aircraft jumped 3.9%, more than forecast, after a 3.7% decrease in December that was smaller than previously reported, data from the Commerce Department showed Feb. 25. Orders for all durable goods — items meant to last at least three years — rose 4.9%, the most since March.
The increase was broad-based — from cars and computers to machines and metals — and a sign that domestic demand is a source of support for manufacturers battered by lukewarm overseas markets. At the same time, the outlook for capital spending among miners, farmers and well drillers has dimmed because of plunging commodity prices.
“It’s good in the sense that we’re not getting further deterioration,” said Brett Ryan, U.S. economist at Deutsche Bank Securities Inc. in New York. “Exports are continuing to get hit by the dollar and you have slowing global growth; cap-ex is probably going to be a bit challenged for the next few quarters.”
Shipments of non-defense capital goods excluding aircraft, which are used in calculating gross domestic product, decreased 0.4% last month. They were revised up to a 0.9% increase in December, the largest advance since June, from a previously reported 0.2% gain. The Commerce Department is set to issue its second estimate of fourth-quarter GDP on Feb. 26.
The median forecast of 80 economists surveyed by Bloomberg News projected total orders would increase 2.9%. A 54.2% surge in bookings for commercial aircraft helped propel the gain.
That followed a 29.1% slump the prior month even though industry data showed a jump in bookings for planes. Industry figures on aircraft orders don’t always correlate with the government statistics on a month-to-month basis, and the Commerce Department’s December data may have reflected more late-year cancellations.
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|By Michelle Jamrisko|
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