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The numbers: Orders for durable goods rose 5.4% in November, the U.S. government said Friday. This is the largest gain since July 2020. It is the second gain in the past three months.

Orders were down 5.1% in the prior month.

Economists had forecast a 2% rise in orders for durable goods — products made to last at least three years.

Core capital-goods orders rose 0.8% last month after a 0.6 fall in October. The figure omits defense and transportation and is a proxy for broader business investment.

Shipments of core goods, which are factored into GDP, slipped 0.1% for the third straight month.

Key details: Transportation orders had the largest increase, rising 15.3% in November. Orders for motor vehicles and parts jumped 2.8% after the end of the UAW strike. Orders for commercial aircraft also soared.

Orders for defense capital goods represented the only weak spot, falling 12%.

Excluding transportation, orders were up 0.5% in November, while orders excluding defense jumped 6.5%.

Big picture: Manufacturing has been flirting with recessionary conditions for month. While orders surprised to the upside in November, much of the gain comes from volatile aircraft orders and economists will need to see sustained improvement before there is confidence in an upward trend.

What are they saying? “Persistent uncertainty over the economic outlook, cooler goods demand, weaker earnings, and somewhat restrictive credit conditions will keep most components of business investment on a weak course in 2024,” said Oren Klachkin, economist at Nationwide.

Market reaction: Stocks
were set to open mixed on Friday while the 10-year Treasury yield
was down to 3.88% in early morning trading.

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