Durable Goods Orders Up 1.8% in November

The Commerce Department reported Thursday that orders for “big ticket” durable goods, excluding the volatile defense category, climbed 1.8% in November, a healthy increase that economists took as a sign of continued strength in the new year.

When defense orders are included, total durable goods orders edged up only 0.1% to a seasonally adjusted $122.89 billion. That followed a 2.9% rise in October.

The overall figure was inflated by a big jump in military orders in October and then depressed when military orders returned to more normal levels last month.

Discounting the swings in defense, the 1.8% rise in civilian orders was the best showing since a 5.2% increase in August. Civilian orders rose only 0.2% in October.

Analysts said they were impressed by the strength in civilian orders, saying the orders should keep U.S. plants humming through the first half of 1989.

More Growth Seen

“This was an impressive gain, and it should pretty much ensure that the economy will keep growing next year,” said Michael Evans, head of a Washington forecasting firm.

Analysts were particularly impressed with a 2.6% rise in orders for business capital goods, which rose to $35.5 billion. This industry is watched for signals of business intentions to expand and modernize. It was the first increase in this category after two consecutive monthly declines and eased fears that investment could be tapering off.

For November, much of the strength in durable goods--items expected to last at least three years--came from an 8.1% rise in demand for electrical machinery to $20.5 billion. Much of this increase reflected rising demand for defense communications equipment.

Total defense orders, however, fell by 17.6% to $8.81 billion after a 43.1% surge in October.

The defense category is highly erratic, depending on when big government contracts are signed.

Shipments of durable goods rose 1% to $119.6 billion in November, after a 0.3% advance in October.