U.S. durable goods orders rebound in December

U.S. durable goods orders and shipments rebounded in December. The nation’s durable goods orders dropped 0.4 percent sequentially in the month, as compared with the market expectations of a 2.6 percent growth. In November, the durable goods orders had dropped 4.5 percent on a sequential basis. But the underlying details of the report show a more positive scenario.

Core capital goods orders grew 0.8 percent on a sequential basis, whereas core capital goods shipments rose 1 percent month-on-month. Both these components are a significant input to the BEA’s estimate of equipment investment in GDP, and the core data is in line with weak business sentiment and modest economic growth.

Most categories of shipments and orders recorded strong gains except defence orders. As expected, non-defence aircraft orders recorded firmly; however, the drop in defence aircraft orders was bigger, leaving total aircraft orders dropping 25.6 percent sequentially. Manufacturers’ inventories of durable goods remained the same on the month.