US durable goods orders expected to show rebound in December

Energy Associated Press

The Commerce Department releases its December report on durable goods. The report will be issued Tuesday at 8:30 a.m. Eastern.

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ORDERS REBOUND: The expectation is that orders for long-lasting manufactured goods rose 0.4 percent in December, according to economists surveyed by data firm FactSet.

DURABLE GOODS: In November, orders for durable goods, items expected to last at least three years, fell 0.9 percent, the third decline in the past four months.

A closely watched category that serves as a proxy for business investment dropped 0.5 percent in November, the third straight monthly decline.

The recent weakness in manufacturing contrasts with earlier months when U.S. factories were enjoying large gains in orders and production. Analysts believe that the recent dip in orders will be reversed in the new year although they are watching closely to see how much harm the recent rise in the value of the dollar does to export sales of American companies.

The Institute for Supply Management reported that factory activity slipped a big in December, edging down to the slowest pace in six month, based on declines in orders and production.

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The ISM manufacturing index fell to 55.5 in December from 58.7 in November. Any reading above 50 signals expansion. In October, the index had hit a three-year high.

Falling prices for oil and other commodities will help many manufacturers by lowering their costs, although the steep plunge in oil could lead to a cutback in spending on oil-and-gas drilling equipment.

Factory production in November surpassed its pre-recession peak, according to data compiled by the Federal Reserve. This gain was spurred by strong output at auto plants. Those gains reflect healthy car sales last year, a trend that is expected to continue in 2015.