Durable Goods Orders Up 4.4%; Gulf Action Credited

Orders to U.S. factories for “big-ticket” durable goods rebounded 4.4% last month, reflecting the Persian Gulf military buildup and sales of commercial aircraft, the government said today. Nevertheless, orders for all of 1990 fell for the first time since 1982 during the last recession.

The Commerce Department reported that December orders for durable goods--items like cars and computers expected to last more than three years--totaled a seasonally adjusted $121.6 billion.

Excluding the defense capital goods and aircraft categories, orders fell 3.4%.

New orders for defense equipment jumped 57% to $8.3 billion after declining 26.9% in November to $5.3 billion, the lowest level since $5.2 billion in July, 1982. Excluding the defense category, orders increased 1.9%.

Transportation orders jumped 13.6% to $32.0 billion following a 25.2% drop a month earlier.

“Large increases in defense shipbuilding and commercial aircraft and parts more than offset a decline in motor vehicles and parts,” the report said.

Excluding the transportation category, orders rose just 1.5%.

Orders fell in six of the 12 months last year, including a revised 10.1% plunge in November, the largest since a 10.5% drop in January, 1990. The November fall was estimated to have been a record 10.7% decline when reported earlier this month.

For the year, orders totaled $1.49 trillion, down 1.6% from 1989 and the first decline since 1982.

Durable goods orders are a key economic barometer of manufacturing industry plans for production. A decrease in orders could result in a slump in that sector and subsequent layoffs.

Indeed, the Labor Department reported earlier that factory payrolls fell by 33,000 last month, bringing manufacturing job losses since December, 1989, to nearly 600,000.