U.S. manufacturing, housing data buoy economic outlook

Tue Dec 24, 2013 12:04pm EST
 
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By Lucia Mutikani

WASHINGTON (Reuters) - Orders for long-lasting U.S. manufactured goods surged in November and a gauge of planned business spending on capital goods recorded its largest increase in nearly a year, pointing to sustained strength in the economy.

While another report on Tuesday showed new home sales slipped in November, sales in October were revised to show the highest pace in more than five years. In addition, house prices rebounded, underscoring the economy's improving fundamentals.

"We are coming out of the shadows of the Great Recession in many ways," said Robert Dye, chief economist at Comerica in Dallas.

The Commerce Department said durable goods orders jumped 3.5 percent last month as demand increased for a range of goods from aircraft to machinery and computers and electronic products.

The increase, which outpaced economists' expectations for a 2 percent rise, more than reversed a drop in October. Excluding transportation, orders recorded their largest gain in six months.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, surged 4.5 percent. The increase snapped two straight months of declines and was the largest advance since January.

The increase in these so-called core capital and overall durable goods orders suggested strength in manufacturing and was further evidence of a firming economic growth outlook.

It narrows the gap with sentiment surveys that have offered a more upbeat view of manufacturing than government data.   Continued...

 
Shoppers look at washers and dryers at a Home Depot store in New York, July 29, 2010. REUTERS/Shannon Stapleton