The better-than-expected but also terrible durable goods report
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Orders for U.S. durable goods — long-lasting items like sheet metal or motors — rose 2.4% in December, but 90% of that increase was from government defense purchases. Excluding that category, orders fell 2.5%.
Worth noting: New orders for nondefense capital goods excluding aircraft fell 0.9%, the biggest drop in eight months.
Why it matters: Business investment was the missing leg of the table for much of last year as the U.S.-China trade war and other geopolitical uncertainties like Brexit kept many companies from investment spending, forcing consumers to hold up the economy alone.
- Tuesday's durable goods report shows that theme likely lasted through the year, and may be a negative drag on U.S. economic growth in 2020.