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U.S. durable goods orders rise for seventh straight month but signs of slowdown emerge

The numbers: Orders for durable, or long-lasting, goods rose 0.9% in November after a 1.8% gain in the prior month, the Commerce Department said Wednesday.

The gain was the seventh consecutive monthly increase and surpassed economists expectations for a 0.3% increase according to a MarketWatch survey.

The increase was powered by orders for transportation equipment, which rose 1.8%. So-called core capital goods orders, which exclude aircraft and defense products, rose 0.4% November after a 1.6% gain in October.

The big picture: Capital investment has been a bright spot for the U.S. economy in recent months and that continued to be the case in November, powered by low interest rates and hopes that the U.S. economy will continue to rebound from a sharp contraction in the first half of the year.

That said, orders for core capital equipment did grow more slowly for the fifth consecutive month at the same time that other manufacturing indicators are also pointing to some weakness.

What they are saying: “The November data are signaling a slowing
in momentum for both business investment and equipment spending,” wrote Rubeela Farooqi, chief U.S. economist for High Frequency Economics in a note. “The manufacturing sector is not immune to surging virus cases and containment measures that could disrupt activity and weigh on demand going forward.”

Market reaction: Stock-index futures added slightly to their gains in the wake of the report, with S&P 500 futures
ES00,
+0.45%

gaining 0.3%.

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