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US-MANUFACTURING-DURABLE-INDICATOR
US aircraft, equipment sales lift US durable goods in January
WASHINGTON, March 14, 2019 (BSS/AFP) – Rising aircraft sales unexpectedly
drove orders for US durable goods higher in January, the third monthly
increase amid a recovery in business investment, according to government data
released Wednesday.
But the increase masked weakness in other key areas, with the defense
sector, autos and electronics suffering declines, according to the Commerce
Department report.
The increase could support GDP growth in the first quarter, though it is
still expected to be significantly slower than prior quarters.
New orders for US-made, big-ticket items rose 0.4 percent to $255.3
billion, the highest level since September. Economists had been expecting a
0.6 percent decline.
Orders for civilian and defense aircraft, which can show large swings
month to month, surged 15.9 percent and 4.5 percent, respectively.
The civilian category is heavily dominated by Boeing but the January
figures will not reflect the current dilemma facing the company following
Sunday’s crash of a 737 MAX 8 in Ethiopia, the second in less than five
months, which prompted many countries to ground the plane.
The data were delayed due to the five-week government shutdown as
President Donald Trump battled Congress for funding for a border wall.
Auto sales fell one percent. But excluding the volatile transportation
sector, durable goods orders were unexpectedly weaker, giving up 0.1 percent.
Economists had called for a 0.1 percent gain.
Sales of primary metals, an industry benefitting from Trump’s aggressive
tariff policies, fell 1.5 percent after being flat in December.
Electronics sank 1.3 percent, while defense items fell 2.3 percent, adding
to December’s steep losses.
But “core” capital expenditures, a category closely watched as a proxy for
business investment in factories, machinery and equipment — which economists
say can help determine productivity and plans for job creation — rose 0.8
percent, recovering some of the declines in recent months.
“Durable goods orders could have been worse,” Ian Shepherdson of Pantheon
Macroeconomics wrote in a note to clients.
“Will be worse soon.”
He noted that aircraft sales were now at the top of their recent range,
suggesting they will likely decline.
And despite the January increase, capital expenditures, have fallen at a
5.3 percent annualized rate over the last three months — the worst
performance in more than two years.
“The dramatic weakening in Chinese manufacturing import orders points to
sustained further declines ahead,” Shepherdson said.
BSS/AFP/HR/0955