A big surge in aircraft sales in January do not reflect the current crisis over Boeing 737 MAX airplane after two crashes in less than five months
Washington (AFP) - Rising aircraft sales unexpectedly drove an orders for US durable goods higher in January, the third monthly increase amid a recovery in business investment, according to government data released Wednesday.
But the increase masked weakness in other key areas, with the defense sector, autos and electronics suffering declines, according to the Commerce Department report.
The increase could support GDP growth in the first quarter, which is still expected to be significantly slower than prior quarters.
New orders for US-made, big-ticket items rose 0.4 percent to $255.3 billion, the highest level since September. Economists had been expecting a 0.6 percent decline.
Orders for civilian and defense aircraft, which can show large swings month to month, surged 15.9 percent and 4.5 percent, respectively.
The civilian category is heavily dominated by Boeing but the January figures will not reflect the current dilemma facing the company following Sunday’s crash of a 737 MAX 8 in Ethiopia, the second in less than five months, which prompted many countries to ground the plane.
The data were delayed due to the five-week government shutdown as President Donald Trump battled Congress for funding for a border wall.
Auto sales fell one percent. But excluding the volatile transportation sector, durable goods orders were unexpectedly weaker, giving up 0.1 percent. Economists had called for a 0.1 percent gain.
Sales of primary metals, an industry benefitting from Trump’s aggressive tariff policies, fell 1.5 percent after being flat in December.
Electronics sank 1.3 percent, while defense items fell 2.3 percent, adding to December’s steep losses.
But a category closely watched as a proxy for business investment in factories, machinery and equipment – which economists say can determine productivity and plans for job creation – rose 0.8 percent, recovering some of the declines in recent months.