Orders for durable goods fell sharply in December

January 27, 2015, 2:16 PM UTC
Spending On Durable Goods And Cars Help Boost Third Quarter GDP
BURBANK, CA - OCTOBER 27: Customers shop for washers and dryers at Lowe's October 27, 2011 in Burbank, California. Spending on durable goods and cars helped boost third quarter Gross domestic product (GDP), which grew at an inflation-adjusted annual rate of 2.5% from July through September, the strongest performance in a year. (Photo by Kevork Djansezian/Getty Images)
Photograph by Kevork Djansezian — Getty Images

The U.S. government reported a surprise drop in new orders for manufactured goods in December, hurt by sharp declines for aircrafts and related parts and transportation equipment.

New orders in December tumbled 3.4% to $230.5 billion from the prior month, the Commerce Department said Tuesday. It was the fourth month out of five that the metric has declined and the worst drop since August. Economists had projected a 0.7% increase, and even the most cautious estimates only predicated a 1.3% drop.

Transportation equipment, also down for four of the past five months, led the decline in December. That segment alone accounted for a $6.8 billion shortfall in orders (overall the decline was $8.1 billion). The data provided by the Commerce Department measure industrial activity and are an indication of future business trends.

New orders declined for most segments, although the motor vehicles and parts segment was again a notable bright spot, with those orders climbing 2.7% sequentially in December.

The Commerce Department also revised the November data, with new orders, shipments and most other data lower than initially reported.

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