Surprise Durable Goods Results Cast Doubt on US Outlook

27 December 2002

Despite recent positive reports on the state of the US economy [WAMN: 24-Dec-02], new figures show there is still plenty of uncertainty going into the new year.

The Commerce Department has revealed a surprise fall in orders for durable goods (those designed to last more than three years) in November.

Total orders to factories slipped 1.4% over the month, a far cry from analysts’ expectations of a 0.5% rise and a turnaround from October’s increase of 1.7%.

The November decline was broad-based, with communications and military equipment the only two major manufacturing sectors to post a rise. Indeed, non-defence orders (considered a barometer of business investment) tumbled 3.2%.

Such figures highlight the contrast between the caution of America’s businesses and the high spending of its consumers. However, the latter is by no means secure, with early reports suggesting holiday retail sales have not lived up to expectations.

Data sourced from: Financial Times; additional content by WARC staff