U.S. Durable Goods Data Underlines Economic Momentum
(REUTERS) -- New orders for U.S. manufactured goods rose in December and a gauge of future business investment rebounded, showing the U.S. economy ended the year with more momentum than previously thought.
Other reports on Thursday showed new claims for jobless benefits rose only moderately last week, suggesting the labor market was still healing, while new U.S. single-family home sales unexpectedly fell in December.
Commerce Department data showed orders for durable goods climbed 3.0 percent last month. That was likely boosted by a surge in orders at aircraft builders like Boeing. Economists had forecast orders rising 2.0 percent.
Durable goods range from toasters to big-ticket items like aircraft which are meant to last three years and more.
The report also showed U.S. companies could be growing more willing to invest the $2 trillion pile of cash they amassed in recent years. The U.S. Federal Reserve warned on Wednesday that business investment had cooled.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, climbed a higher-than-expected 2.9 percent. It had declined the previous two months.
What it does tell you about going into the new year is that there's some momentum here, said Jacob Oubina, an economist at RBC Capital Markets in New York.
Also, shipments of non-defense capital goods orders excluding aircraft, which go into the calculation of gross domestic product, rose 2.9 percent after declining 1.0 percent in November.
The overall increase in orders was buoyed by an 18.9 percent surge in orders for civilian aircraft. Boeing received 287 orders for aircraft during the month, according to the plane maker's website, up from 96 in November.
Investors in U.S. stocks appeared to take little notice of the data, with prices slightly higher. U.S. Treasury debt prices rose as fears grew that the European debt crisis was heating up again.
In a separate report, a gauge of future U.S. economic activity rose to a five-month high in December as labor market conditions improved, the private U.S. Conference Board said.
Labor Department data showed new U.S. claims for unemployment benefits rising last week but the underlying trend continued to point to improving labor market conditions.
Initial claims for state unemployment benefits increased 21,000 to a seasonally adjusted 377,000, the Labor Department said. The four-week moving average for initial claims, seen as a measure of labor market trends, fell 2,500 to 377,500.
We're still very much established below 400,000, continuing to suggest that there is modest improvement in the labor market, said Lindsey Piegza, an at FTN Financial in New York.
On Wednesday, Federal Reserve Chairman Ben Bernanke said the U.S. central bank could do more to help growth if the economy falters, after policymakers said interest rates would remain near zero until late 2014.
Among the darker clouds looming over the U.S. economy is a sovereign debt crisis in Europe that is widely seen triggering a recession in the euro zone.
Greece resumes tortuous negotiations on a debt swap with private creditors in Athens on Thursday, with the European Central Bank thrown into the mix after IMF chief Christine Lagarde said public sector holders of Greek debt may need to take losses too.
Increased consumer spending and efforts by companies to restock their shelves likely led the U.S. economy to accelerate at the end of 2011 although many economists expect some of that strength to wane early this year.
A report due Friday is expected to show the economy grew at a 3.0 percent annual rate in the fourth quarter, up from 1.8 percent in the previous period.
The Commerce Department also released a report showing new U.S. single-family home sales unexpectedly fell in December for the first time in four months and the median home price dropped, dampening some of the hopes the housing sector will boost the economy this year.
(Additional reporting by Lucia Mutikani in Washington and Emily Flitter and Karen Brettell in New York; Editing by Andrea Ricci)
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