Durable Goods Orders Spurt 0.9% in Month : Civilian Purchases Offset Military Buying Decline

Orders for big ticket durable goods climbed 0.9% in December as a surge in demand for civilian products offset a steep decline in military orders, the government reported Thursday.

The Commerce Department said a 55.4% drop in demand for military equipment was offset by a 6.9% jump in non-military orders, the biggest increase in the civilian category in almost four years.

But this strength failed to impress economists, who cautioned that much of the gain reflected a temporary buying surge as both consumers and businesses rushed to take advantage of expiring tax breaks.

Analysts said they did not see anything in the numbers to make them change their minds that the economy is still mired in a period of sluggish growth.

Beating the Deadline

“The surge in orders for durable goods in December suggests that a massive wave of preemptive buying took place in order to beat the new tax law,” Jerry Jasinowski, chief economist of the National Assn. of Manufacturers, said. “There is already evidence of a substantial falling off in car sales in January, supporting the view that the December surge was a transitory development.”

While an increase in orders normally portends a rise in production and in manufacturing employment down the road, economists said much of the gain came in products that were being bought off shelves for immediate delivery.