Durable Goods Orders Fall But Show Underlying Strength Excluding Defense And Aircraft Hot

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The report from the Commerce Department did show underlying strength outside of the defense and aircraft categories.
 
So-called non-defense capital goods orders excluding aircraft rose 6.3%, the best increase in over a year that is also reflective of increased business confidence.
 
New orders for machinery rose 13.5%, the largest increase since May 2010. The decline in defense capital goods orders was the largest since July 2000.
 
Spending for defense doubled in December 2012 in preparation of the steep cuts that were to occur as part of the fiscal cliff. As a last minute agreement was reached to avoid the worst tax hikes, defense cuts were postponed until March 1.
 
The significant drop in civilian aircraft was due to long-term planning in the industry instead of fears over the Boeing Dreamliner, which has had problems with lithium-ion batteries.
 
The Dreamliner’s issues did have an effect on Boeing. The company received only two orders for aircraft in January compared to 183 in December and 164 so far in February.

 

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