Durable-goods orders rise 4.6%

WASHINGTON — Demand for long-lasting manufactured goods in the United States rose sharply in December on strong gains in aircraft orders. But companies slowed their orders of goods that signal investment plans, indicating manufacturing could stay choppy in 2013.

The Commerce Department said Monday that orders for durable goods increased 4.6 percent in December compared with November.The gains were led by a 56.4 percent increase in military aircraft orders and a 10.1 percent increase in commercial aircraft orders.

Orders rose in other major categories, including machinery, communications equipment and primary metals.

Demand is “back on track following a soft patch,” said Peter Newland, an economist in New York for Barclays Plc. “By the fourth quarter, some confidence about global growth returned to the corporate sector.”

A more closely watched gauge of business investment plans increased just 0.2 percent. Economists were encouraged that orders for so-called core-capital goods kept rising in December after gains of 3 percent in both November and October.

Still, the increases followed a weak stretch in demand for those goods that had raised concerns about companies’ confidence in the economy. And with Americans paying higher Social Security payroll taxes this year without much gain in their wages, most economists predict consumer spending to suffer. That could dampen demand for big-ticket items and slow overall economic growth.

“The strength in durable goods orders for December is a most welcome development,” said Dan Greenhaus, an analyst at BTIG. “Going forward though, despite the better numbers, we still expect business investment ... to slow yet again in 2013.”

Orders for durable goods, which are expected to last at least three years, can fluctuate from month to month. For all of 2012, durable-goods orders rose 4.1 percent. Demand for core capital goods fell 0.3 percent last year.

Paul Ashworth, chief U.S. economist at Capital Economics, said the growth rate of business investment in equipment and software in the October-December quarter should come in close to 5 percent, an encouraging sign.

Ashworth, however, is also worried about the increase in Social Security payroll taxes. That could make businesses nervous and further slow economic growth.

The economy grew at an annual rate of 3.1 percent in the April-June quarter. The government will provide its first estimate at overall economic growth in the October-December quarter on Wednesday. Many analysts believe that growth slowed in the final three months of last year to less than 2 percent.

A measure of Americans who signed contracts to buy homes fell last month after reaching a 2 1/2-year high in November. Sales were held back by a limited supply of available homes.

The National Association of Realtors said Monday that its seasonally adjusted index for pending home sales dropped 4.3 percent in December from November to 101.7. That’s still 6.9 percent higher than a year ago.

The decline signals that sales of previously owned homes may cool off in the coming months. There’s generally a one- to two-month lag between a signed contract and a completed sale.

Still, the broader trend in home sales remains solid. Completed sales of previously owned homes rose last year to their highest level in five years, one of many signs of recovery in the housing market last year. And the Realtors’ group forecasts that sales will rise 9 percent this year, as the recovery strengthens. Other economists have similar forecasts.

“We believe the disappointment represents just a brief lull in what are volatile data rather than a fundamental change of direction,” said Jim O’Sullivan, an economist at High Frequency Economics.

Information for this article was contributed by Martin Crutsinger and Christopher S. Rugaber of The Associated Press and Shobhana Chandra of Bloomberg News.