New orders for durable goods rebounded sharply from their dismal performance of October, helped in large part by strength in the transportation sector.
The Commerce Department said Friday that orders for durable goods - those items built to last at least three years - increased by $4 billion, or 1.9 percent, last month, coming on the heels of an 8.2 percent decrease in October.
Excluding transportation, however, new orders dropped by 1.1 percent.
Commerce said transportation orders jumped 9.4 percent last month, following a 21.3-percent plunge in October. Orders for commercial planes rose by 7.2 percent and orders for military aircraft jumped 40.0 percent.
“Defense and aerospace industries have extremely volatile order patterns and the recent rebound in aerospace business can mask the weakness in other parts of the industrial sector, as happened in November," said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI. “Non-defense capital goods orders excluding aerospace actually fell 1.4 percent in November following a large 3.9 percent decline the previous month, Manufacturing activity is slowing at year-end and will grow at a much slower rate in 2007.”The government said actual shipments of manufactured durable goods, which are up three of the last four months, increased 0.1 percent in November, to $209.6 billion. Unfilled orders, up eighteen of the last nineteen months, increased 1.7 percent to $678.5 billion.
Meanwhile, orders for computers and electronics rose by 7.5 percent.
Inventories of manufactured durable goods increased 0.3 percent, to $294.5 billion.
The durable goods report is known as one of the more volatile barometers of the U.S. economy, prone to wild swings. That said, the latest reading was better than what most economists had been projecting.