A report released by the Commerce Department on Thursday showed new orders for U.S. manufactured durable goods soared by much more than expected in the month of December.
The Commerce Department said durable goods orders spiked by 5.6 percent in December after tumbling by 1.7 percent in November.
Economists had expected durable goods orders to surge by 2.5 percent compared to the 2.1 percent slump that had been reported for the previous month.
The sharp increase in durable goods orders largely reflected a substantial rebound in orders for transportation equipment, which skyrocketed by 16.7 percent in December after plunging by 5.0 percent in November.
Orders for non-defense aircraft and parts led the turnaround, soaring by 115.5 percent in December after plummeting by 30.7 percent in November.
Excluding the rebound in orders for transportation equipment, durable goods orders edged down by 0.1 percent in December after inching up by 0.1 percent in November. Ex-transportation orders were expected to come in unchanged.
Decreases in orders for machinery and computers and electronic products were partly offset by a jump in orders for electrical equipment, appliances and components.
The report also showed orders for non-defense capital goods excluding aircraft, a key indicator of business spending, dipped by 0.2 percent in December after coming in unchanged in November.
Shipments in the same category, which is the source data for equipment investment in GDP, also fell by 0.4 percent in December after slipping by 0.2 percent in November.
“Alongside the already-reported falls in production of business equipment, that’s another signal that higher interest rates are increasingly weighing on business investment,” said Andrew Hunter, Senior U.S. Economist at Capital Economics.