The US Commerce Department yesterday said durable goods orders rose 0.3 per cent last month, held back by a surprise drop in civilian aircraft orders that analysts saw as temporary. The gain lagged economists expectations for a two per cent rise. Details of the report were much stronger, however, with a proxy for business spending plans -- non-defense capital goods orders excluding aircraft -- increasing a solid 1.3 per cent.
Meanwhile the Labor Department reported that initial claims for state unemployment benefits dropped 8,000 to 470,000 last week, less than economists had expected, after rising for three weeks in a row.
“We remain on track, but it’s not a strong, strong recovery that would be consistent with the big downturn,” said Kurt Karl head of economic research at Swiss Re in New York.
Economists took encouragement from the orders for durable goods, those meant to last at least three years. They saw the data as having little impact on perceptions of an economy steadily recovering from the worst downturn since the 1930s.
But even as declines in housing sales in December reported earlier this week hinted at renewed weakness in the housing market and cast a cloud on the economy’s recovery, the fourth quarter is seen having grown.
The US government’s report on fourth-quarter GDP due to be published today is expected to show the economy expanded at a 4.6 per cent annual pace.