Washington, DC, January 26, 2007--Orders for durable goods jumped by 3.1% in December, led by stronger demand for airplanes and capital equipment, the Commerce Department reported Friday.
Orders for new durable manufactured goods increased in most sectors, from autos to machinery, last month. The report confirms other data showing the nation's manufacturing sector regained momentum as the year ended after encountering a soft patch earlier in the fall.
The December increase was in line with economists' expectations of a 3.5% gain after taking into account a small upward revision made in November's orders, to 2.2%.
Excluding 4.8% growth in transportation goods, December's orders rose 2.3%, the first increase since September and the best showing since March.
For all of 2006, durable-goods orders rose 7%, cooling from 2005's 8.6% pace. The figures are not adjusted for price changes.
Durable goods are manufactured goods designed to last three years or longer. Because of that durability, orders and shipments of these big-ticket items are typically very sensitive to the ups and downs of the business cycle, adding to their value as a leading indicator of economic activity.
Orders for core capital equipment--the kind of goods producers invest in to build their productive capacity--rose 2.4% in December, also the biggest gain since March and the first increase since September. For 2006, core capital equipment orders rose 9%.
Meanwhile, shipments of durable goods increased 0.8% in December, the most since August. For the year, shipments rose 5.6% after a 5.9% gain in 2005.
Inventories rose 0.4% in December as unfilled orders--a signal of future production--increased by 2.3%.
December's orders for transportation goods rose 4.8%, as civilian airplane orders jumped 26.5% and orders for motor vehicles increased 6.8%. Orders for defense aircraft were 20.5% higher, marking the third straight month of gains more than 20%.
Shipments of transportation goods rose 3.3%.
Orders for electronics (excluding semiconductors) rose 1%, while shipments (which do include semiconductors) fell 5.7%. Orders for computers fell 3.1%.
Orders for machinery rose 5%, while shipments showed 1.1% growth last month.
Orders for fabricated metals rose 2.5%, while shipments rose 2.2%.
Orders for primary metals rose 4.5%, with shipments increasing 2.5%.
Orders for electrical equipment fell 1.4%, and December's shipments rose 2.3%.
