US durable goods orders show modest 0.2% December gain

WASHINGTON (AP) β€” Orders to U.S. factories for big-ticket manufactured goods rose a modest 0.2% in December, held back by a big drop in the volatile aircraft sector. A key category that tracks business investment decisions slowed.

The rise in orders for durable goods, items expected to last at least three years, followed much stronger increases of 1.2% November and 1.8% in October, the Commerce Department reported Wednesday.

Orders for commercial aircraft, hard hit because of the sharp drop in air travel during the pandemic fell 51.8% in December. Separately, Boeing reported Wednesday that it lost $8.4 billion in the fourth quarter, capping a record loss for all of 2020.

A category that covers business investment plans rose 0.6% following bigger gains of 1% in November and 1.7% in December.

Economists had expected total orders would post a stronger advance of around 1% in December but noted that the overall gain was held back by the big drop in aircraft orders. Excluding transportation orders, total orders rose 0.7% in December, and that followed a 0.8% rise in November.

Even with the slowdown, total orders are close to their pre-pandemic levels. Orders for motor vehicles rose 1.4% in December while demand for defense aircraft jumped 5%.

“The manufacturing sector is fairing fairly well even as virus cases have surged,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. β€œThe December data are signaling still strong but slower growth in both business investment and equipment spending.”

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