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Constrained by Aircraft, US Durable Goods Orders Post Modest Dec. Gain

A 0.2% rise followed much stronger increases of 1.2% in November and 1.8% in October.

In this Jan. 27, 2020 file photo, a worker pushes a cart past refrigerators at a Home Depot store location in Boston.
In this Jan. 27, 2020 file photo, a worker pushes a cart past refrigerators at a Home Depot store location in Boston.
AP Photo/Steven Senne

WASHINGTON (AP) — Orders to U.S. factories for big-ticket manufactured goods rose a modest 0.2% in December, held back by a big drop in the volatile aircraft sector. A key category that tracks business investment decisions slowed.

The rise in orders for durable goods, items expected to last at least three years, followed much stronger increases of 1.2% November and 1.8% in October, the Commerce Department reported Wednesday.

Orders for commercial aircraft, hard hit because of the sharp drop in air travel during the pandemic fell 51.8% in December. Separately, Boeing reported Wednesday that it lost $8.4 billion in the fourth quarter, capping a record loss for all of 2020.

A category that covers business investment plans rose 0.6% following bigger gains of 1% in November and 1.7% in December.

Economists had expected total orders would post a stronger advance of around 1% in December but noted that the overall gain was held back by the big drop in aircraft orders. Excluding transportation orders, total orders rose 0.7% in December, and that followed a 0.8% rise in November.

Even with the slowdown, total orders are close to their pre-pandemic levels. Orders for motor vehicles rose 1.4% in December while demand for defense aircraft jumped 5%.

"The manufacturing sector is fairing fairly well even as virus cases have surged,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “The December data are signaling still strong but slower growth in both business investment and equipment spending.”

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