Durable goods orders in the U.S. were up for January, the first time in three months, according to the latest numbers from the Commerce Department.
New orders jumped 2.8% from December to $236.1 billion led by a big pick up in orders in the transportation segment. The growth in that segment is something Cliff Waldman, director of economic studies for the MAPI Foundation, says can cloud the big picture, “Much of the rebound, however, came from a more than 9% increase in normally volatile transportation equipment demand. Stripping out transportation, total new orders rose by a modest 0.3%, a disappointing performance when considering contractions of 0.9% in December and 1.3% in November."
Breaking it down, new orders for commercial aircraft were up a big 128.5%, including a drop of 17.9% in defense aircraft orders.
“Overall, the January report paints a picture of weakness in durables demand,” Waldman said. “The primary and fabricated metals sectors both saw modest declines in new orders. Machinery equipment orders did have a 1.9% increase in January, but this followed a 3.5% contraction in December. Further, machinery orders were an alarming 6.7% below January 2014."
For January, durable goods orders were up 1.6% year-over-year, and despite the deceiving numbers, Waldman is predicting “moderate growth” in U.S. manufacturing moving forward.