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Business Title: U.S. Durable Goods Orders Fall 2.5% Amid Steep Drop In Aircraft Orders (RTTNews) - With orders for transportation equipment in the U.S. showing another steep drop in the month of December, the Commerce Department released a report on Thursday showing an unexpected decrease in durable goods orders for the month. The report showed that durable goods orders fell by 2.5 percent in December following a revised 0.1 percent decrease in November. The decrease came as a surprise to economists, who had expected orders to increase by about 1.5 percent. The unexpected drop in durable goods orders was largely due to a continued decrease in orders for transportation equipment, which fell by 12.8 percent in December after falling by 13.1 percent in the previous month. A substantial decrease in orders for non-defense aircraft and parts contributed to the drop in orders for transportation equipment. The report said orders for non-defense aircraft and parts plunged by 99.5 percent in December following a 59.6 percent decrease in November. However, Paul Ashworth, Chief U.S. Economist at Capital Economic, called the steep drop in orders for non-defense aircraft and parts "nonsense," noting that aerospace giant Boeing (BA) said it booked orders for 55 aircraft in December, up from 17 in November. "Admittedly, 38 of those orders were only logged on 29th December, so might not show up in the official figures until January," Ashworth said. "Nevertheless, that still leaves 17 planes that appear to have flown into the Census Bureau's version of the Bermuda Triangle." Excluding the drop in orders for transportation equipment, durable goods orders actually rose by 0.5 percent in December compared to a 4.5 percent increase in the previous month. Economists had expected ex-transportation orders to increase by 0.6 percent. The modest increase in ex-transportation orders was largely due to a 10.6 percent jump in orders for machinery, which was partly offset by decreases in orders for primary metals and computers and related products. The Commerce Department also said that orders for non-defense capital goods, excluding aircraft, which is seen as a good indicator of business spending, rose by 1.4 percent in December following a 3.1 percent increase in November. Additionally, the report showed that shipments of durable goods rose by 1.4 percent in December after rising by 0.5 percent in the previous month. Shipments of machinery surged up by 6.7 percent. Inventories of durable goods rose for the twelfth consecutive month, rising by 0.7 percent in December following a 0.9 percent increase in November.
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