- Federal Reserve
Orders to US factories for long-lasting manufactured goods plunged in December, with a key category that is proxy for business investment plans declining for a second consecutive month, increasing the risk of negative fourth quarter GDP surprise. According to the Commerce Department, durable goods orders plummeted 5.1% in the reported month after the 0.5% decrease in November. Durable goods orders have declined in four of the past five months, reflecting the pressures Americans manufacturers experience due to a strong US Dollar and global economic weakness. The category that tracks business investment plans plunged 4.3% last month following a 1.1% decrease in November.
A separate report showed applications for unemployment benefits dropped last week from a six-month high, indicating the labour market recovery remains intact despite a steep stock market sell-off and signs the US economy has lost some momentum. Initial claims for unemployment benefits declined to a seasonally adjusted 278,000 in the week ended January 23, down from 294,000 in the preceding week. The four-week moving average, a less volatile measure, fell to 283,000 last week from 285,250. Since early March last year claims have remained below the 300,000 level, which is typically associated with an improving job market.
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