Durable-goods orders sink 2.5% at the end of 2019

The numbers: Orders for long-lasting or durable goods surged 2.4% in December owing to the military, but business investment in the civilian part of the economy declined again to finish the year weakly.

Economists surveyed by MarketWatch had forecast a 0.3% decline in orders for durable goods — products made to last at least three years.

Orders for ships, fighter planes and other Pentagon weapon systems skyrocketed 90% in December. If the military buildup is set aside, U.S. orders for durable goods sank 2.5%.

Adding to a disappointing report, the government revised orders for November to show an even bigger 3.1% drop. Initially the decline was reported as 2.1%.

The weakness in orders and business investment could be a drag on the economy in 2020 unless it turns around.

What happened: Orders declined in most parts of the manufacturing base, including autos and commercial aircraft. 

Bookings for passenger planes tumbled 75%, reflecting Boeing’s BA, -0.40%   ongoing struggles with its grounded 737 Max. Auto orders sagged almost 1%, the government said Tuesday.

If cars and planes are stripped out, durable-goods orders slipped 0.1%. Transportation often exaggerates the ups and downs in orders because of lumpy demand from one month to the next.
Still, orders also declined for primary metals, machines and electrical equipment.

What’s more, a closely followed measure known as orders for core capital goods also fell nearly 1%. These orders as seen as a proxy for business investment, which has been weak for the past year.

Companies scaled back investment as the U.S. trade war with China heated up, a struggle that strained global supply chains and hurt U.S. exports.