Orders to U.S. factories for big-ticket manufactured goods posted a modest increase in December, but the gain was not enough to prevent orders from plunging by a record amount for the entire year.
The Commerce Department reported today that orders for durable goods edged up a slight 0.3 percent last month, a much weaker showing than the 2 percent advance economists had been expecting.
For all of 2009, durable goods orders plunged by 20.2 percent, the largest drop on records that go back to 1992. The decline highlighted the battering that U.S. manufacturers have suffered during the recession.
The 20.2 percent orders decline last year followed a 5.8 percent drop in 2008, the first back-to-back annual declines since 2001 and 2002, a period when the country was also dealing with a recession.
However, the declines were much steeper this time around, reflecting the tough times in manufacturing as General Motors and Chrysler were forced into bankruptcy filings and the total manufacturing industry shed thousands of jobs, contributing to the 7.2 million jobs lost since the recession began in December 2007.
For December, the 0.3 percent gain in orders followed a revised decline of 0.4 percent in November, a drop that was previously reported as a small gain of 0.2 percent. Orders fell by 0.1 percent in October after posting a sizable 2.5 percent rise in September.
The December increase was supported by a 3.6 percent jump in orders for motor vehicles and parts, the biggest one-month gain in this troubled sector since May 2007. Orders for aircraft, a volatile category, plunged by 38.2 percent in December after an even bigger 40 percent drop in November.
Total transportation orders fell by 2 percent. Excluding transportation, orders for durable goods would have been flat in December after a 2.1 percent November gain. This category has posted gains for three of the last four months.
Strength last month came in such areas as primary metals including steel, up 8.1 percent, and machinery, up 6 percent. Demand for computers and other electronic products fell by 3 percent.