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US December factory orders below forecast

WASHINGTON – NEW orders at United States factories rose a less-than-expected 2.3 per cent in December, the steepest gain since July, on strong aircraft sales, a government report showed yesterday.

Orders for durable goods, items intended to last three years or longer, jumped 5 per cent, also the biggest gain since July, as civilian aircraft orders climbed 11.7 per cent, the Commerce Department said. Durables orders were revised down from the 5.2 per cent gain originally reported last week.

When transportation was stripped out, orders rose a modest 0.7 per cent.

Analysts polled by Reuters were expecting a 2.5 per cent gain in factory orders and a 5 per cent rise in durable goods orders.

‘Things that are tied to housing are weakening, but things that aren’t are holding up reasonably well,’ said senior economist Mark Vitner at Wachovia Corp in Charlotte, North Carolina. ‘We may see frustratingly slow economic growth but we will still see growth.’

Non-defence capital goods orders excluding aircraft, considered a gauge of business spending, climbed 4.5 per cent, the largest increase since March.

‘Carmakers and home builders are working off inventories, and that has got to cause further reductions up the pipeline,’ said Mr Vitner.

 

Source: REUTERS (The Straits Times 4 Feb 08)

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