On Thursday, February 25, according to the U.S. Department of Commerce, the preliminary value of U.S. durable goods orders for January rose 3.4% from a year earlier, better than the expected increase of 1.1%, and the previous value of last December was revised upward from an increase of 0.5% to an increase of 1.2%.
This data rose for nine consecutive months, after the previous three consecutive months of slowing growth, reverting to the largest monthly percentage increase since July 2020, showing that the U.S. manufacturing recovery is accumulating momentum early this year.
Notably, while total production in U.S. factories has yet to return to pre-Epidemic levels, the value of orders for core commercial goods is already significantly higher than a year ago. This value volume rose to a record high in January, fueled by increased orders for computers and electrical equipment, Bloomberg said.
Deducting aircraft non-defense capital durable goods orders, usually regarded as a measure of U.S. business investment, rose by 0.5% in January from the preliminary value, rising for the ninth consecutive month, but weaker than the expected 0.8%, the previous value was revised upward from an increase of 0.7% to 1.5%, as seen in January rose less than in recent months.
Another key data shows that the preliminary value of core capital goods shipments in January rose 2.1% from a year earlier to a three-month high, which is included in the calculation of GDP, an indicator reflecting corporate equipment investment. Some analysts say that a new round of fiscal stimulus in the U.S., increased vaccinations, and the prospect of infrastructure projects should continue to support business investment in the coming months.
Specifically, deducting the more variable transportation category, the preliminary value of durable goods orders in January became a 1.4% increase in the chain, higher than the expected 0.7%, but the previous value was revised upward from an increase of 1.1% to an increase of 1.7%. The preliminary value of durable goods orders, excluding defense products, increased by 2.3% YoY, and it can be seen that the overall increase in durable goods orders mainly reflects the huge increase in aircraft and defense hardware and equipment.
Among them, aircraft orders increased significantly. January’s new orders for defense aircraft and parts rose 63.5% YoY, compared with a 1% decline in the previous value in December. And new orders for non-defense commercial aircraft and parts jumped nearly 390% YoY, compared to a 56.7% YoY decline in the December prior.
In addition, the major metals used for all types of goods and computer orders also increased sharply, computer and related products orders rose 8.7% YoY, orders for electrical equipment and appliances rose 4.2% YoY, although new orders for new cars and trucks fell slightly.
Analysis pointed out that the epidemic Home economy has made Americans buy more durable goods such as furniture and technology equipment, replenishment of inventory is also beneficial to factories, but manufacturing growth momentum may slow down into the summer, with the popularity of vaccines and travel restrictions lifted, people’s demand for services will rebound, supply chain woes such as semiconductors and the lack of skilled workers will also somehow hinder manufacturing output growth.
Data released earlier today showed that U.S. GDP in the fourth quarter of last year rose a revised 4.1% annualized from a year earlier, compared to a forecast of 4.2% and a previous 4.0%. Nonetheless, the U.S. still has about 10 million fewer jobs than it did in February 2020.
Chad Moutray, chief economist at the Association of American Manufacturers, said core capital goods orders and shipments have hit record highs in recent months, suggesting that manufacturing will continue to grow steadily as the economy recovers. But with manufacturing still below pre-epidemic production levels and employment down 575,000 from a year ago, “there is more work to be done to achieve a full economic recovery.”
Recent Comments