News and Information from Strategic Real Estate Opportunities

Orders to U.S. factories for big-ticket manufactured goods  posted a modest increase in December, but the gain was not enough to prevent orders from plunging by a record amount for the entire year.

The Commerce Department reported today that orders for durable goods edged up a slight 0.3 percent last month, a much weaker showing than the 2 percent advance economists had been expecting.

For all of 2009, durable goods orders plunged by 20.2 percent, the largest drop on records that go back to 1992. The decline highlighted the battering that U.S. manufacturers have suffered during the recession.

The 20.2 percent orders decline last year followed a 5.8 percent drop in 2008, the first back-to-back annual declines since 2001 and 2002, a period when the country was also dealing with a recession.

Building permits in December 2009 were 653,000, an increase of 10.9% from November and 15.8% above the December 2008 estimate.  Housing starts fell 4.0% from the prior month, to 557,000.  This was 0.2% above the December 2008 estimate.

On a seasonally adjusted basis, the December Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the index increased 2.7 percent before seasonal adjustment.

The seasonally adjusted increase in the all items index was broad based, with the indexes for food, energy, and all items less food and energy all posting modest increases. Within the latter group, a sharp rise in the index for used cars and trucks was the largest contributor to the 0.1 percent increase, while the indexes for airline fares, apparel, and lodging away from home rose as well. In contrast, the indexes for rent and owners’ equivalent rent were unchanged and the index for new vehicles declined.

Grocery store food indexes showed broad-based increases, leading to the food index rising 0.2 percent, its largest one-month advance in over a year. The energy index also rose 0.2 percent; this was its smallest increase in five months. The indexes for fuel oil and gasoline rose, but the electricity index was unchanged and the natural gas index declined.