Nov. Demand for Durable Goods Beat Estimates

Demand for goods such as machinery and electronics climbed more than forecast in November, showing U.S. companies are planning to expand next year as they look beyond the tax increases and spending cuts slated to take effect.

Orders for durable goods increased 0.7 percent last month after a 1.1 percent gain in October that was larger than previously estimated, the Commerce Department reported today in Washington. The advance exceeded the median forecast of economists surveyed by Bloomberg that projected a 0.3 percent rise. Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, climbed for a second month.

Companies may be more willing to invest as global growth stabilizes and American consumers keep spending, unfazed by the deadlocked discussions on fiscal policy. Manufacturers such as Comtech Telecommunications Corp. (CMTL) are looking for clarity from Washington to spur a rebound in government orders.

“The worst of the capital spending slowdown is over,” Harm Bandholz, chief U.S. economist at UniCredit Group in New York, said before the report. “Pent-up demand is building up right now. Once the uncertainty about the fiscal cliff is over, we’ll see the pent-up demand being released. The economy should pick up momentum next year, in part driven by capital spending.”

Forecasts for total durable goods of the 63 economists surveyed by Bloomberg ranged from a 2.6 percent drop to a 3.3 percent increase.


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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments.
He has a deep understanding of market fundamentals and the impact of global events on capital markets.
He is respected among professional traders for his skilled analysis and career history as global head
of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean
has played an instrumental role in driving awareness of the forex market as an emerging asset class
for retail investors, as well as providing expert counsel to a number of internal teams on how to best
serve clients and industry stakeholders.
Dean Popplewell