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Orders for US durable goods advance 2.4% in December

Martin Crutsinger
Associated Press

Washington – Orders to U.S. factories for big-ticket manufactured goods rose in December as a big jump in demand for military aircraft offset a sharp decline in commercial aircraft that reflected Boeing’s continued problems with its 737 Max. A key category that tracks business investment fell by the largest amount in eight months.

The Commerce Department said Tuesday orders for durable goods rose 2.4% in December, the strongest showing since August. However, excluding defense, new orders would have fallen 2.5%.

The category that tracks business investment plans dropped 0.9%, the biggest decline since a 1.1% setback in April.

Clothes dryers, top, are stacked on top of washing machines at a Home Depot store in Boston.

Business investment has been hurt over the past year by uncertainties generated by President Donald Trump’s trade war with China. Now that agreement has been reached on a Phase One deal, there is hope that a more stable outlook on trade will convince businesses to start investing again to expand and modernize their operations.

Demand for commercial aircraft fell a sharp 74.7%, reflecting the struggles Boeing has had with its troubled 737 Max plane following two fatal crashes.

Economists believe Boeing’s difficulties could trim overall economy growth by as much as one-half percentage point in the current January-March quarter.

The commercial aircraft drop was offset by a 168.3% surge in demand for military planes.

Orders for motor vehicles and parts dipped 0.9% leaving overall activity in the transportation sector up by 7.6%. Excluding transportation, which can be volatile, orders would have fallen 0.1% in December following a 0.4% drop in November.

Demand for machinery fell 1.1% in December while demand for computers and related products declined 9.7%.

U.S. manufacturing was hurt last year by a global economic slowdown and the uncertainties caused by the Trump administration’s get tough trade policies.