The numbers: Autos and airplanes boosted orders for U.S. durable goods in December, but demand was weak in other key manufacturing segments and business investment tailed off at the end of the year.
Orders for long-lasting goods rose 1.2% in December, according to a government report delayed for more than a month because of the recently ended partial shutdown
Economists surveyed by MarketWatch had forecast a 1.4% increase in orders for durable goods, or products made to last at least three years.
If cars and planes are stripped out of the equation, orders rose a scant 0.1%. Transportation often exaggerates the ups and downs in orders because of lumpy demand from one month to the next.
The originally reported 0.7% increase in durable-goods orders in November was revised up to 1%.
What happened: Orders for commercial planes surged 28% in December and bookings for new cars and trucks climbed 2.1%.
Beyond that the industrial sector was weak. Orders fell for machines, primary metals, networking and electrical equipment.
A key measure of business investment, known as core orders, slipped 0.7% in December.
Businesses cut back on investment toward the end of the year, worried about what seemed like a growing threat of recession, political turmoil in Washington and an ongoing trade dispute with China that’s disrupted supply chains.
Investment for the full year rose a healthy 6.1%, however.
Big picture: The industrial side of the economy slowed toward the end of 2018, but the fears of recession have largely evaporated and the U.S. is still expanding at a healthy pace in early 2019. Strong consumer spending is keeping the factories humming.
A lingering worry is the drop-off in capital spending. Higher investment is the key to a stronger economy and a better standard of living in the long run. The festering trade dispute and a weaker global economy have caused businesses to reevaluate their plans.
What they are saying?: “Taken together, the data confirm that business investment momentum continues to cool and underscore that growth during the final quarter of the year likely slowed to a mid-2% pace,” economists at Oxford Economics told clients.
The 10-year Treasury yield
was flat at 2.67%.