Durable Goods Rise In December

The Commerce Department said that orders for durable goods edged up 0.3% last month, a much weaker showing than the 2% advance economists had been expecting. For all of 2009, durable goods orders plunged by 20.2%, the largest drop on records that go back to 1992, the Associated Press reports. Economists are hoping that improving outlooks in the U.S. and globally will make 2010 a better year for U.S. manufacturers.

The 20.2% orders decline last year followed a 5.8% drop in 2008, the first back-to-back annual declines since 2001 and 2002, a period when the country was also dealing with a recession.

The hope is that both the U.S. and global economies are now mounting rebounds that will boost demand for manufactured goods and lead factories to rehire laid off workers. The expectation is that U.S. exports will also benefit from a decline last year in the value of the dollar. A weaker dollar makes U.S. goods more competitive on overseas markets.

For December, the 0.3% gain in orders followed a revised decline of 0.4% in November, a drop that was previously reported as a small gain of 0.2%. Orders fell by 0.1% in October after posting a sizable 2.5% rise in September.

The December increase was supported by a 3.6% jump in orders for motor vehicles and parts, the biggest one-month gain in this troubled sector since May 2007. Orders for aircraft, a volatile category, plunged by 38.2% in December after an even bigger 40% drop in November.

Strength last month came in such areas as primary metals, including steel, were up 8.1%, and machinery, up 6%. Demand for computers and other electronic products fell by 3%. Steelmakers United States Steel Corp. and Nucor Corp. indicated they believe the steel market will gradually improve this year as the economy rebounds, though they warned that demand in commercial construction remains weak. AK Steel Holding Corp. credited increased demand, particularly from automotive customers, for a better-than-expected fourth-quarter profit and said it sees further improvement this year.