USA-ECONOMY/

(Reuters)

Durable Goods Orders Unchanged in November

Politics Dow Jones Newswires

Orders for long-lasting factory goods were flat in November and a key measure of business investment fell in the latest sign of weak demand in the U.S. manufacturing sector.

New orders for durable goods--refrigerators, bulldozers, fighter jets and other products designed to last at least three years--were roughly unchanged in November from the prior month on a seasonally adjusted basis, the Commerce Department said Wednesday.

Economists surveyed by The Wall Street Journal expected orders would decline 0.6% last month. In October, overall orders rose by 2.9%, unchanged from an earlier estimate.

Military spending propped up November's headline figure. Orders for defense capital goods surged 44.4% last month including a 46.9% increase in orders for defense aircraft and parts. Excluding defense, orders for durable goods fell 1.5% in November after increasing 3.0% in October.

Durable-goods orders excluding the often-volatile transportation category fell 0.1% in November from the prior month after rising 0.5% in October.

A closely watched proxy for how much businesses are spending on new equipment--orders for nondefense capital goods excluding aircraft--fell 0.4% in November from the prior month after rising by a downwardly revised 0.6% in October. New orders in the category were down 3.6% through the first 11 months of 2015 compared with the same period a year earlier.

Orders for all durable goods in the first 11 months of 2015 fell 3.7% on the year.

The manufacturing sector, which accounts for roughly 12% of the nation's economic output, has slumped in the last year as low oil and gas prices squeeze domestic energy producers while weakness overseas and a strong dollar reduce demand for U.S. exports.

The Federal Reserve last week said a broad measure of industrial production fell 0.6% in November and was down 1.2% from a year earlier. A private-sector gauge of U.S. factory activity produced by the Institute for Supply Management fell last month to its lowest level since the end of the 2007-09 recession.

Still, Fed officials this month felt confident enough in the economic outlook to start raising short-term interest rates that had been pinned near zero for seven years.

"There are pressures on some sectors of the economy, particularly manufacturing and the energy sector, reflecting global developments and developments in commodity markets and energy markets," Chairwoman Janet Yellen said at her Dec. 16 press conference. "But the underlying health of the U.S. economy, I consider to be quite sound."

Gross domestic product, the broadest measure of goods and services produced across the U.S. economy, expanded at a 2% seasonally adjusted annual rate in the third quarter, the Commerce Department said Tuesday, bolstered by a 9.9% growth rate for fixed nonresidential investment in equipment.

Overall growth appears fairly steady as 2015 comes to an end. Forecasting firm Macroeconomic Advisers said Tuesday it expected GDP to expand at a 1.9% pace in the fourth quarter.

Write to Ben Leubsdorf at ben.leubsdorf@wsj.com and Josh Mitchell at joshua.mitchell@wsj.com

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