Big Sales in Transportation Field Offset Car Slowdown

Orders to U.S. factories for durable goods rose 2.5% in December, but virtually all of the gain was concentrated in the non-automobile transportation sector, the government said today.

The Commerce Department said orders for durable goods--big-ticket items expected to last more than three years--rose to a seasonally adjusted $133.5 billion after gaining 4.9% in November.

November’s gain had been revised downward from a 5.1% advance that originally had been reported last month.

The December orders brought to $1.52 trillion the total amount of orders for 1989, a 5.9% increase. That was the smallest gain since a 0.4% gain in 1986 and followed a 10.9% advance in 1988.

The December increase in overall durable orders was concentrated in the transportation industry, where orders rose 8.7% to $39.9 billion following a 10.6% gain in November. Large increases in aircraft, shipbuilding and tanks more than offset declines in motor vehicles, the department said.

Excluding the transportation category, orders would have been unchanged.

Some economists have said the economy should pick up during the new year as interest rates continue to fall. A possible indication of this thinking was today’s report on non-defense capital goods orders in the durable goods report, often a barometer of business investment plans.

The department said these orders jumped 18.6% in December to $46 billion on top of increases of 7.9% in November and 1.8% in October.