Durable Goods Orders Increase Amid Spike In Orders For Aircraft

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Orders for manufactured durable goods showed a much bigger than expected increase in the month of January, according to a report released by the Commerce Department on Thursday, with the growth largely due to a substantial increase in orders for commercial aircraft.

The report showed that durable goods orders increased by 3.0 percent in January following an upwardly revised 1.9 percent increase in December. Economists had expected orders to increase by 1.5 percent compared to the 1.0 percent growth originally reported for the previous month.

However, the bigger than expected increase in durable goods orders was due in large part to a 15.6 percent increase in orders for transportation equipment, which in turn reflected a shocking 126 percent increase in orders for commercial aircraft and parts.

Excluding the increase in orders for transportation equipment, durable goods orders actually fell by 0.6 percent in January compared to an upwardly revised 2.0 percent increase in the previous month. The decrease surprised economists, who had expected 1.0 percent growth.

Commenting on the jump in commercial aircraft bookings, Paul Ashworth, Senior U.S. Economist at Capital Economics, said, "The orders data reported by Boeing (BA) indicated that this spike actually occurred in December, leaving us bemused when the official figures showed aircraft orders falling in the final month of last year."

"For whatever reason, those extra Boeing orders have now turned up in January's official orders data," he added. "Better late than never."

The unexpected decrease in ex-transportation orders in January was partly due to a 9.7 percent drop in orders for machinery, which followed a 7.4 percent increase in December.

On the other hand, orders for computers and electronic products, primary metals, and electrical equipment, appliances, and components showed notable increases.

The report also showed that orders for non-defense capital goods, excluding aircraft, which is seen as a good indicator of business spending, fell by 2.9 percent in January following an upwardly revised 3.3 percent increase in December.

The Commerce Department also said that shipments of durable goods edged down by 0.2 percent in January after rising by 2.4 percent in the previous month.

Inventories of durable goods fell for the thirteenth consecutive month, edging down by less than 0.1 percent in January after falling by 0.2 percent in December.

Orders for manufactured durable goods showed a much bigger than expected increase in the month of January, according to a report released by the Commerce Department on Thursday, with the growth largely due to a substantial increase in orders for commercial aircraft. The report showed that durable goods orders increased by 3.0 percent in January following an upwardly revised 1.9 percent increase in December. Economists had expected orders to increase by 1.5 percent. (Market News Provided by RTTNews)