Economic Watch: Durable Goods Shipments and Orders Gain in 2013, Consumer Confidence Increasing
January 28, 2014
Shipments and new orders for manufactured durable goods in the U.S. ended 2013 on a down note, but each were up for the year, according to a new U.S. Commerce Department report released Tuesday.
Shipments in December fell 1.9% from the month before, following four straight monthly increases. It was led by a drop in transportation shipments, falling 5.7% during the same time, also down following four consecutive monthly gains.
New order during December fell for the second out of the past three months, down 4.3% from November’s hike of 2.6% and the largest decline since July. The falloff was also led by a decline in the transportation sector, with new transportation orders falling 9.5%. Excluding transportation orders, new orders decreased 1.6%.
Despite the monthly declines, shipments of manufactured durable goods for all of 2013 were 3.4% greater than in 2012 while new orders gained 4.9% during the same time
“Heading into the end of the year, November's rise in business spending increased expectations that businesses were increasingly optimistic about growth prospects heading into the New Year. December’s decline, while not completely negating this positive sentiment, leaves the underlying trend incorporate spending directionless,” said Lindsey Piegza, chief economist at the investment firm Sterne Agee. “Clearly, businesses remain cautiously optimistic at best regarding the state of the U.S. economy and the U.S. consumer amid a still tepid job, and more importantly, stagnant income growth environment.”
Meantime, a separate report from the private research group The Conference Board shows its Consumer Confidence Index, which had rebounded in December, increased again in January. The index now stands at 80.7, up from 77.5 in December.
Consumers’ assessment of the present situation continues to improve, with both business conditions and the job market rated more favorably,” said Lynn Franco, director of economic indicators at The Conference Board. “Looking ahead six months, consumers expect the economy and their earnings to improve, but were somewhat mixed regarding the outlook for jobs. All in all, confidence appears to be back on track and rising expectations suggest the economy may pick up some momentum in the months ahead.”