Durable-Goods Orders Rose 5.6% in December Driven By Aircraft Demand

By Bryan Mena

New orders for durable goods--products meant to last at least three years--increased sharply 5.6% in December to a seasonally adjusted $286.9 billion, the Commerce Department said Thursday.

Demand for durable goods--which include factory equipment, computers and washing machines--rose primarily on aircraft orders. Orders for civilian aircraft and parts rose 115.5%, the department said. Excluding transportation, new orders fell 0.1% in December from the prior month.

The December gain came after a revised 1.7% decrease in November. That monthly decline in overall durable-goods orders was the steepest drop in 2022. For all of 2022, orders rose 10.5% from the prior year.

The figures measure demand from businesses and consumers, and also reflect rising prices. Orders figures aren't adjusted for inflation. Consumer price increases eased last month for the sixth time in a row, but remain historically high.

A closely watched proxy for business investment--new orders for nondefense capital goods excluding aircraft--decreased 0.2% to $74.9 billion in December compared with the previous month, the Commerce Department said.

The Federal Reserve raised interest rates at an aggressive pace last year and is likely to continue increasing rates in 2023 as it tries to tame high inflation, though at a slower pace given recent signs of slowing price increases. Higher interest rates can make big-ticket purchases more expensive for businesses and consumers.

Write to Bryan Mena at [e-mail]

(END) Dow Jones Newswires

01-26-23 0914ET