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Durable goods orders rise as aircraft bookings soar

New orders for long-lasting U.S. manufactured goods rose in January as aircraft bookings rocketed.
/ Source: Reuters

New orders for long-lasting U.S. manufactured goods rose in January as aircraft bookings rocketed, but recorded their largest decline in two years excluding transportation, according to a government report on Thursday that hinted at a slowdown in manufacturing.

The Commerce Department said durable goods orders rose 2.7 percent, the biggest increase since September, after falling by a revised 0.4 percent. The increase was in line with economists' expectations and December's orders were previously reported to have dropped 2.3 percent.

Excluding transportation, orders unexpectedly tumbled 3.6 percent after a revised 3.0 percent increase in December, which was previously reported as a 0.8 percent rise. Economists had expected orders excluding transportation to rise 0.4 percent last month.

The rise in overall orders reflected a 4,900 percent surge in aircraft bookings, which likely reflected the bulk of December orders from aircraft maker Boeing, which analysts said had not been fully captured in the durable goods report for that month.

Outside transportation, there were big declines in orders for machinery, computers and communications equipment.

Durable goods orders are a leading indicator of manufacturing and the report suggested factory activity, a strong pillar of the economic recovery, was slowing down.

The Commerce Department report showed non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, dropped 6.9 percent last month, the biggest decline in two years, after revised 4.3 percent increase in December. Markets had expected a 2.5 percent decline.