PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Economic News: Durable Goods Orders Up in January – Beating Expectations

By at 14 March, 2019, 9:28 am

by Raymond J. Keating-

The Census Bureau’s durable goods report for January was positive, beating market expectations.

While economists and other watchers expected a decline in durable goods orders for January, orders actually increased by 0.4 percent, which was the third consecutive monthly increase.

Drilling down, transportation orders, which can be very volatile from month to month, led the way with a gain of 15.9 percent for commercial aircraft. Orders excluding transportation were down by 0.1 percent. Defense orders also can be volatile, and orders excluding defense grew by 0.7 percent.

In addition, the change in nondefense capital goods excluding aircraft orders serves as an important gauge of private investment in equipment and software – a key measure for business investment in the GDP data.

For January, new orders in this area grew by 0.8 percent. That was a welcome bounce back after being on a general decline since July of last year.

Over the past year, durable goods orders grew by 7.8 percent, and by 3.7 percent excluding transportation and by 7.1 percent excluding defense. And over the past year, nondefense capital goods excluding aircraft orders were by 3.1 percent.

Business investment remains critical to current and future economic growth. Along with entrepreneurship, of course, business investment is the source of innovation, efficiency and productivity gains in the economy.

The January increase in nondefense capital goods excluding aircraft orders is plus, and needs to continue advancing in 2019.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council

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