Durable Goods Orders Higher Than Forecasted
Bookings for goods meant to last at least three years rose 3.5 percent, according to the Commerce Department's report on December 24. The median estimate called for a 2 percent advance. The positive November bookings compares to a 0.7 percent drop in the prior month.
Non-military bookings experienced the largest increase at 21.8 percent. Dow component Boeing (NYSE: BA) said it received orders for 110 aircrafts in November compared to 79 in October.
Auto sales rose 3.3 percent in the month, the highest since February. On an annualized basis, November's 16.3 million units sold represents the highest reading since 2007.
Orders for non-defense capital goods excluding aircrafts rose 4.5 percent, the largest jump since January. This data set is generally used as a “proxy for future business investment in items like computers, engines and communications gear,” according to Bloomberg.
“These are very promising signs for business spending,” said Gennadiy Goldberg, an economist at TD Securities. “It's fairly positive for growth prospects in the fourth quarter.”
Strong economic data like this merely confirms that the Fed's recent decision to taper its bond-purchasing program has been justified.
Just a mere week ago the central bank announced it will scale back its $85 billion-a-month bond purchases to $75 billion starting in January.
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