Aircraft orders push US durable goods higher to start 2017

Aircraft orders push US durable goods higher to start 2017

Washington (AFP) - New orders for US manufactured goods rose in January after two straight months of declines, bolstered by a large monthly swing in aircraft orders, the Commerce Department reported Monday.

Excluding the volatile transportation sector, however, the trend went in the opposite direction, with January seeing a decline of 0.2 percent rather than the expected increase.

President Donald Trump has put the manufacturing sector front-and-center in his jobs-focused political messaging, bringing intense focus to developments in the sector.

Orders for factory-made US goods rose 1.8 percent to $230.4 billion for the month, matching analyst expectations. Excluding defense articles, orders rose 1.5 percent.

January's gains more than made up for the 0.8 percent decline recorded in December.

Orders for US civilian and defense aircraft and parts -- big-ticket items that are subject to big swings -- rose 69.9 percent and 59.9 percent respectively.

Outside the defense sector, new orders for capital goods rose for a second consecutive month, gaining 3.6 percent to reach $64.3 billion.

This helped confirm the reversal of a recent downward trend driven by falling oil prices over the summer.

Orders for computers and communications equipment saw their largest decreases since 2015, with communications products falling five percent for the month to $3.8 billion.

Despite the weakness outside the transportation sector, Ian Shepherdson of Pantheon Macroeconomics said the trend in the three months ending in January showed an annualized rate of 8.9 percent, the best performance since the fall of 2014.

This strength pointed to a revival in capital expenditures, he said.

"We hoped for better but we are not unduly disappointed and these data do not change our core view that the manufacturing sector and capital spending are recovering quite strongly," he wrote in a client note.

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