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WASHINGTON / AP
US businesses boosted their orders for long-lasting manufactured goods in January by the largest amount in three months, but a key category that tracks business investment plans slipped.
Orders for durable goods rose 1.8 percent in January after two months of declines, the Commerce Department said. The strength stemmed from a big surge in demand for commercial aircraft and military aircraft. Excluding the transportation category, orders actually fell 0.2 percent, the weakest showing since June. Demand in a category that tracks business investment plans fell 0.4 percent, the first decline since September. Analysts believe business investment will strengthen this year as the manufacturing sector recovers from two years of lackluster gains.
“The manufacturing sector and capital spending are recovering quite strongly as the hit from the collapse in the oil sector … begins to reverse,†said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Sal Guatieri, senior economist at BMO Capital Markets, said that the strength seen in durable goods followed recent gains in such areas as consumer spending and home sales. He said he looked for overall growth to accelerate to above 2 percent in the current January-March quarter.
Manufacturing firms have struggled since 2015 with a rising value of the dollar, which makes exports more expensive. In addition, a plunge in oil prices triggered sharp cutbacks in investment spending at energy companies. However, in recent months the dollar has stabilized and oil prices have resumed rising, developments that are expected to benefit exports and domestic investment.