- James Bullard, St. Louis Fed President
US orders for long-lasting goods advanced by the most in 10 months as demand surged across the board. According to the Commerce Department, orders for durable goods, surged 4.9% in January, after December's revised 4.6% drop. Non-defence capital goods orders excluding aircraft, a closely watched proxy for business spending plans, soared 3.9% after plunging by a revised 3.7% in December. The durable goods report was the latest sign that the worst of the manufacturing downturn was likely to be over. Manufacturing production increased solidly last month and factory payrolls that month rose by the most since August 2013. The sector, which makes up 12% of the US economy, is hurt by a strong Dollar, moribund global demand and capital spending cuts by oilfield service firms. Yet core orders are nearly 3% lower now compared with a year ago, reflecting a slowdown in business investment that was a negative contributor to the economy in the second half of 2015.
A separate report showed the number of Americans applying for unemployment benefits increased last week, but remained below levels associated with a tightening labour market. Initial claims for state unemployment benefits surged 10,000 to a seasonally adjusted 272,000 for the week ended February 20, the Labor Department reported.
© Dukascopy Bank SA