Goods orders exceed forecast in sign of factory rebound
Orders for durable goods climbed more than forecast in December, showing U.S. manufacturing rebounded following a mid-year slump.
Bookings for goods meant to last at least three years rose 4.6 percent, exceeding the highest forecast of economists surveyed by Bloomberg, after a 0.7 percent gain in November, a Commerce Department report showed Monday in Washington. The median forecast of 76 economists surveyed by Bloomberg called for a 2 percent advance.
Improving auto sales and a rebound in housing are underpinning the economic expansion, indicating orders will keep coming in for manufacturers from General Electric to DuPont . Faster growth in overseas markets and an agreement in Congress to avoid automatic government-spending cuts would help lift business confidence and spur greater investment.
Demand is "back on track following a soft patch," said Peter Newland, an economist in New York for Barclays. "By the fourth quarter, some confidence about global growth returned to the corporate sector."
Estimates in the Bloomberg survey ranged from a decrease of 1.4 percent to a 4.5 percent advance.
December capped the first four-month gain in demand for durable goods since comparable records began in 1992.
Excluding demand for transportation equipment, which is often volatile, orders increased 1.3 percent, also beating the median projection which called for a 0.8 percent advance.
Aircraft bookings, which are often volatile, rose 10.1 percent after falling 12.9 percent in November, Monday's report showed. Boeing Co. (BA), the Chicago-based aerospace company, said it received 183 orders in December, up from 124 the prior month.
Orders for non-defense capital goods excluding aircraft, a proxy for future business investment in items like computers, engines and communications gear, increased 0.2 percent following gains of 3 percent in November and October. The advance over the past three months is the biggest since mid-2011.
Shipments of those capital goods, used in calculating gross domestic product, increased 0.3 percent after rising 2.2 percent the prior month, also more than previously estimated. Sales climbed for three consecutive months, the longest stretch of gains since mid-2011.