New orders for manufactured durable goods in December decreased $4.7 billion or 2.6% to $176.8 billion, the U.S. Census Bureau announced on Jan. 29. This was the fifth consecutive monthly decrease and followed a 3.7% November decrease.
Excluding transportation, new orders decreased 3.6%. Excluding defense, new orders decreased 4.9%.
"There is nothing good about the December report," said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI. "In the final three months of 2008, durable goods orders are 17% below the same period one year ago. The report is also a depressing harbinger for Friday's report on fourth quarter GDP. Orders for nondefense capital goods excluding aircraft, an indicator of private equipment spending, fell 2.8% in December and for the fourth quarter were 7% below their level one year ago. The consumer led recession has lowered factory operating rates and created economy-wide slack.
"In addition, the global nature of the severe recession knocked out an important pillar of strength for equipment industries -- exports," he added. "An improvement in the gloomy conditions for capital goods, unfortunately, will not occur until late this year. Businesses first need to see positive signs that credit is available and consumers are willing to spend again."