American workers at a manufacturing plant for long-lasting durable goods. (PHOTO: REUTERS)
The Commerce Department reported Tuesday that durable goods orders dropped 3.4 percent in December, far below economists’ estimates of a 0.5 percent gain. Durable goods orders decreased $8.1 billion, or 3.4 percent to $230.5 billion.
The latest decrease marks a decline in the sector for four of the last five months and follows a 2.1 percent decrease in November. Transportation equipment led the decrease with a $6.8 billion drop, or 9.2 percent to $66.7 billion.
Excluding transportation, which has also been down for the last four out of five months, orders fell 0.8 percent, compared to forecasts of a 0.6 percent increase. Shipments in transportation, which had increased in 3 out of the 4 prior months, increased $2.2 billion, or 3.1 percent to $74.5 billion.
Overall shipments in manufactured durable goods, which had declined for two straight months, increased $2.6 billion, or 1.1 percent to $246.8 billion.
New orders for non-defense capital goods decreased $7.9 billion in December, or 9.7 percent to $73.3 billion. New defense orders for capital goods decreased $0.5 billion, or 5.3 percent to $8.7 billion.
Inventories remain bloated, as they now sit at their highest level since the series was first published on a NAICS basis in 1992. Inventories of manufactured durable goods, which were up twenty of the last twenty-one months, increased $2.0 billion, or 0.5 percent to $410.8 billion. This follows a 0.5 percent increase in November.
New orders for durable goods in November were revised down to $489.3 billion from the initially reported $492.7 billion, while shipments were also revised down to $494.9 billion from $495.7 billion.
