US Economic Data Roundup

Durable Goods Orders Dropped Again in December

Orders for durable goods decreased by 2.6% last month to a seasonally adjusted $176.80 billion, the Commerce Department said Thursday. Orders fell 5.7% in 2008 compared to the previous year as the recession worsened. Orders increased by 1.3% in 2007. The 5.7% decline last year was the second largest ever, topped only by a 10.7% plunge in 2001.

A key barometer of business equipment spending, orders for non-defense capital goods excluding aircraft, fell by 2.8%, after increasing 1.7% in November. Orders were flat in 2008. December shipments for non-defense capital goods excluding aircraft, used by the government when calculating gross domestic product figures, rose by 0.9% in December after dropping 1.4% the previous month. Unfilled orders, a sign of future demand, decreased in December by 1.3%, the biggest drop since October 2002. Core durable goods orders (ex-transportation) fell by 3.6% in December. Orders dropped 7.2% for computers and electronics, 5.0% for machinery, 3.6% for fabricated metals, and 6.9% for primary metals. Orders climbed 9.4% for electrical equipment. Motor vehicles and parts decreased by 5.2% last month and were down 19.6% on the year.

New Home Sales

New home sales set a new all-time low with sales running at just a 331,000 unit pace. A net revision for the last three months took 40,000 units. Sales of new homes fell 14.7 percent in December, and are nearly 45 percent off of their year-ago pace. A weak economy coupled with the problems we have had for several years may continue to put downward pressure on sales. However, lower interest rates and talk of further help from Washington may mean a bottom comes sooner rather than later.