Orders for long-lasting factory goods rose in November, the latest sign of improving demand this year for U.S. manufactured products.
Orders for durable goods–products designed to last at least three years, such as computers and trucks–increased 1.3% from the prior month to a seasonally adjusted $241.36 billion in November, the Commerce Department said Friday. The overall increase was led by orders for airplanes, motor vehicles and military equipment.
Economists surveyed by The Wall Street Journal had expected a 2% gain for orders last month.
Orders for October were revised to a narrower 0.4% decrease from a previous estimate of a 0.8% decline. Through the first 11 months of the year, demand for durable products was up 5.4%, compared to the same period a year earlier, well outpacing inflation.
A closely watched proxy for business investment, new orders for nondefense capital goods excluding aircraft, edged down 0.1% in November. But October’s reading was revised up to a healthy 0.8% gain. The investment proxy was initially seen as declining in October.
The business investment measure increased 5.1% in the first 11 months of this year compared to the same period in 2016.
Improved capital spending this year is consistent with other measures showing businesses are confident in the economy. Firms stepping up spending more than eight years after the recession ended could suggest the expansion has more room to run. The economy grew at better than a 3% rate for two straight quarters, and economists expect it maintained near that pace in the final three months of the year.
More broadly, manufacturing has been an area of strength for the economy for more than a year. Durable orders, up three of the past four months, have mostly risen since the middle of 2016, propelled by a stabilized U.S. energy industry, steady spending by domestic consumers and a global economy that’s experiencing its best stretch of growth in a decade.
Friday’s report showed orders in the volatile civilian aircraft category rose 14.5% in November, and orders for motor vehicles and parts increased 1.4% last month.
Excluding transportation, orders were down 0.1% in November.
Orders for defense capital goods advanced 4.8% from a month earlier. Excluding defense, total orders rose 1% last month.
Source: Dow Jones