U.S. Durable Goods Orders Show Unexpected Slump In November
December 23 2019 - 04:27AM
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Reflecting a steep drop in orders for transportation equipment,
the Commerce Department released a report on Monday showing an
unexpected slump in new orders for U.S. manufactured durable goods
in the month of November.
The report said durable goods orders plunged by 2.0 percent in
November after edging up by a downwardly revised 0.2 percent in
October.
The sharp decline came as a surprise to economists, who had
expected durable goods orders to jump by 1.5 percent compared to
the 0.5 percent increase that had been reported for the previous
month.
The unexpected nosedive in durable goods orders came as orders
for transportation equipment plunged by 5.9 percent in November
after inching up by 0.1 percent in October.
Orders for defense aircraft and parts led the way lower,
plummeting by 72.7 percent, while orders for non-defense aircraft
and parts also fell by 1.8 percent.
Excluding the steep drop in orders for transportation equipment,
durable goods orders came in unchanged in November after rising by
0.3 percent in October. Economists had expected ex-transportation
orders to tick up by 0.2 percent.
A sharp increase in orders for electric equipment, appliances
and components was offset by a notable decrease in orders for
machinery.
Orders for non-defense capital goods, excluding aircraft, a key
indicator of business spending, crept up by 0.1 percent in November
after jumping by 1.1 percent in October.
However, the report said shipments in the same category, which
is the source data for equipment investment in GDP, fell by 0.3
percent in November after climbing by 0.7 percent in October.
"The November shipments data suggest another contraction in
equipment spending in Q4 after contracting 3.8% in Q3," said a note
from economists at Oxford Economics.
The economist added, "We expect industrial momentum will remain
muted in 2020 amid an environment of sluggish global growth,
persistent trade policy uncertainty, a U.S. strong dollar, and
subdued corporate profitability."
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