By Courtney Schlisserman and Timothy R. Homan
Dec. 24 (Bloomberg) -- Orders for durable goods rose and fewer Americans than anticipated filed claims for jobless benefits, showing companies are gaining confidence the economic expansion will be sustained into 2010.
Excluding demand for transportation equipment, which is often volatile, bookings for long-lasting goods climbed a greater-than-forecast 2 percent in November, figures from the Commerce Department showed today in Washington. The number of workers applying for unemployment insurance dropped last week to the lowest level in more than a year, the Labor Department said.
“Business spending, after a long recession hiatus, is staging a comeback,” said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio. “Payrolls were cut too deeply over the last year, and hence, there will be a need to rehire to some degree.”
Stocks gained around the world on signs the global economic recovery was strengthening as companies such as 3M Co. anticipate spending on new products will increase and firings will slow. Economists at Morgan Stanley in New York raised their forecast for fourth-quarter economic growth to 5.1 percent after the report on durable goods, a percentage point more than they previously estimated.
The Standard & Poor’s 500 Index rose 0.5 percent to close at a 15-month high of 1,126.48. Treasury securities fell, pushing the yield on the benchmark 10-year note up to 3.80 percent at 1:25 p.m. in New York from 3.75 percent late yesterday.
Aircraft Orders
A 33 percent slump in civilian aircraft orders, which are often volatile, limited last month’s gain in total durable goods orders to 0.2 percent.
Economists forecast orders would increase 0.5 percent, according to the median of 72 projections in a Bloomberg News survey. Estimates ranged from a drop of 1.3 percent to an increase of 3.5 percent. The gain in bookings was the second in the past three months, following an unrevised 0.6 percent drop in October.
Orders excluding transportation were projected to rise 1.1 percent, according to the Bloomberg survey median. Estimates for this ranged from increases of 0.3 percent to 3 percent.
Initial jobless claims fell by 28,000 to 452,000 in the week ended Dec. 19, the fewest since September 2008, the Labor Department’s report showed. The number of people receiving unemployment insurance dropped in the prior week and those receiving extended benefits also decreased.
Broad-Based Gains
The durable goods report showed gains outside of transportation were broad-based, with increases in demand for machinery, metals, computers and communications gear.
Shipments of non-defense capital goods excluding aircraft, which is used in calculating gross domestic product, climbed 0.8 percent in November, and October’s reading was revised to show a 1.5 percent jump, compared with a previously estimated 0.3 percent drop. Bookings for such goods, a proxy for future business spending, increased 2.9 percent in November.
It was a “much stronger than expected report,” Ted Wieseman, an economist at Morgan Stanley wrote in a note to clients. Combined with revisions to October, the figures are “pointing to a much better outlook” for fourth-quarter corporate spending, he said.
Business investment in equipment and software may rise at a 5 percent annual pace this quarter, up from their previous estimate that called for a 3.5 percent drop, Wieseman said. Smaller declines in inventories will add about 2.8 percentage points to growth, he said. The economy grew at a 2.2 percent annual rate in the third quarter.
‘Looking Better’
“Overall commercial spending is looking better than what we had hoped for,” Steve Felice, president of Round Rock, Texas-based Dell Inc.’s small- and medium-business division, said Dec. 21 in a Bloomberg Television interview. “We’re coming into this holiday season much more optimistic than a year ago.”
3M will increase capital expenditures next year by as much as 15 percent to about $1.05 billion, Chief Executive Officer George Buckley said Dec. 22. The St. Paul, Minnesota-based company will spend as much as $100 million to research new products, part of which will be used to hire 60 to 80 employees with doctorates, he said.
3M has trimmed about 6,400 jobs worldwide since last year and Buckley said he anticipates no large reductions in 2010 unless the economy weakens again.
Jobless Rolls Fall
The Labor Department report showed the number of workers receiving jobless benefits dropped by 127,000 to 5.08 million in the week ended Dec. 12. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
The number of people who’ve use up their traditional benefits and are now collecting extended payments decreased by about 2,900 to 4.73 million in the week ended Dec. 5. Thirty- nine of the 51 states and territories where workers are eligible to receive the government’s latest 13-week extension have begun to report data, a Labor Department spokesman said.
President Barack Obama this week signed into law legislation that included a stopgap provision to ensure that unemployment benefits aren’t cut off over the holidays.
To contact the reporters on this story: Courtney Schlisserman in Washington cschlisserma@bloomberg.net; Timothy R. Homan in Washington at thoman1@bloomberg.net
No comments:
Post a Comment