Forex »

US Durable Goods Orders Fall to 5-Month Low

Finances
Share on StockTwits
Published on
www.finances.com
US Durable Goods Orders Fall to 5-Month Low

New orders for US durable goods unexpectedly fell last month, fueling speculation business investment may cool in 2014.

Orders for manufactured goods meant to last three years or more plunged 4.3 percent in December, official data from the Commerce Department revealed today. Economists polled by Thomson Reuters and Bloomberg called for a gain of 1.8 percent, after a 2.6 percent increase the previous month. The unexpected drop exceeded the most pessimistic of forecasts, according to a Bloomberg poll. Core durables excluding transportation equipment fell 1.6 percent, compared to a 0.1 percent gain the prior month.

New orders fell by the steepest margin in five months, as shipments and capital goods declined. Shipments fell 1.9 percent after four consecutive months of increases. Nondefense capital goods orders fell 5 percent, official data showed. Transportation equipment led the decrease, falling 9.5 percent.

The report raises concern 2014 may be a weak year for business investment, at a time when the US economy is gaining traction. The US economy has been supported in recent months by strong job creation and a more confident consumer segment. Recent data from the London-based Markit Group shows the US economy likely added some-200,000 jobs in January, offsetting December’s weaker pace.

The report on durable goods is one of the last components economists will use before finalizing their growth outlook for the US economy. The Commerce Department is expected to release official fourth quarter GDP data Thursday. US gross domestic product expanded at a rate of 1.4 percent in final three months of 2013, according to a median estimate of economists polled by Reuters.

Share on StockTwits