Durable Goods Increase 0.1% In November

Dec. 27, 2007
Cause for concern

New orders for manufactured durable goods in November increased $0.2 billion or 0.1% to $214.7 billion, the U.S. Census Bureau announced Dec .27. This followed three consecutive monthly decreases including a 0.4% October decrease. Excluding transportation, new orders decreased 0.7%. Excluding defense, new orders increased 1.2%

Defense new orders for capital goods in November decreased $2.1 billion or 24.3% to $6.5 billion, while nondefense new orders for capital goods increased $2.8 billion or 3.8% to $75.9 billion.

"The sluggish demand for durable goods during November indicates that business confidence in the economy continues to be adversely impacted by the deep housing downturn, the ongoing crisis in global financial markets and growing uncertainties about the short-term path of U.S. consumer spending," said Clifford Waldman, economist for the Manufacturers Alliance/MAPI.

"The modest decline in new orders for non-defense, non-aircraft capital goods on the heels of a nearly 3% plunge during October suggests that business spending is unlikely to support overall economic activity if the consumer buckles. And the second significant monthly decline in machinery orders suggests that economic uncertainty and elevated input prices have eroded entrepreneurial spirits in the manufacturing sector. While these data are mixed, with primary metals, computers, and motor vehicles all showing positive activity, the signals from the November report do nothing to allay mounting concerns about the near-term path of the U.S. economy and manufacturing sector," Waldman added.

Inventories of manufactured durable goods in November, up four of the last five months, increased $2.4 billion or 0.8% to $317.2 billion.

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