Durable Goods Orders Move In the Right Direction

The weak demand for aircrafts and automobiles offset the strength in a number of other areas as orders for durable goods increased in November.

In a sign that manufacturing is beginning to regain steam, the growth excluding transportation improved by a wider-than-expected margin giving hope that the economy is pulling itself out of the recession.

The Commerce Department reported on Thursday that orders for durable goods improved by 0.2 percent last month, compared to the economist forecast of 0.5 percent. Excluding transportation the durable goods sector grew by 2 percent, ahead of the expected 1.1 percent growth.

Demand for in the transportation sector fell 5.5 percent to the lowest levels in five month. Demand for commercial aircraft dropped 32.5 percent in November, while orders for automobiles fell 0.2 percent.

The October drop of 1.3 percent excluding transportation was revised up to a loss of 0.7 percent.

For November demand for machinery rose 3.5 percent and steel grew by 1.4 percent. Orders for computers and electronic equipment jumped 3.7 percent, the biggest gain since February.

This is positive news for the weak manufacturing sector, which saw two major automobile companies file for bankruptcy protection earlier this year.