Orders for long-lasting goods made in the U.S. fell in December for the second month in a row, largely because of a cutback in demand from the Pentagon.
New orders for durable goods dropped 0.4% last month, the government said Friday. Economists polled by MarketWatch had forecast a 2.2% increase.
In premarket action, stock futures were little changed. The S&P 500 SPX, -0.21% was on track to open flat after gaining 21% over the last 52 weeks.
Bookings for defense-related equipment, including jets and other major hardware, accounted for the unexpected decline. Orders were also weak for primary metals, fabricated parts and computers.
Other segments of the U.S. manufacturing base performed better, though.
Orders for new autos, for instance, rose 2%. Car dealers finished the year with a bonanza of sales, though they also resorted to deep discounts to lure buyers.
And orders for commercial aircraft climbed 42%, Commerce Department data show. Aircraft orders often swing sharply from month to month, however, and can obscure trends in business spending.
If autos and all aircraft including military planes are omitted, bookings for durable goods advanced 0.5% in December. It’s the sixth straight increase in that orders minus transportation.
A key measure of business investment known as core capital-goods orders rose 0.8%, and it increased in each month of the fourth quarter.
That’s a good omen for 2017. These orders fell 3.4% in 2016, part of the reason the U.S. economy grew more slowly compared to the prior year.
Shipments of core capital goods, a category used to help determine gross domestic product, climbed 1% in December.
In November, orders for durable goods were revised down to show a 4.8% decline instead of 4.4%.