Washington, DC, February 24 - New orders for U.S.-manufactured goods declined in December, primarily due to a sharp drop in commercial aircraft bookings, according to data released by the U.S. Census Bureau. Factory orders fell 0.7% to $617.5 billion, following a 2.7% increase in November. This decline exceeded the consensus forecast of a 0.6% drop slightly, though year-over-year orders still rose 3.7%. The report, delayed by a prior government shutdown impacting fourth-quarter GDP estimates, highlights the volatility inherent in manufacturing data, particularly within the transportation sector.
The downturn was largely driven by commercial aircraft orders, which plummeted 24.8% after surging 98.2% the previous month. This category remains highly volatile due to the lumpy nature of large aircraft purchases, where individual deals can significantly sway monthly figures. Non-defense aircraft and parts orders contributed heavily to the overall pullback in transportation equipment, even as Boeing reported 175 aircraft orders in December, mostly for lower-cost models, compared to 164 in November. Such fluctuations underscore the challenges in interpreting short-term trends in the aerospace industry.
Despite the headline decline, underlying demand in other manufacturing areas showed resilience. Orders excluding transportation equipment increased, supported by gains in machinery, computers, and electronic products. Robust investment in artificial intelligence, including data center expansions, bolstered demand for related equipment and offset some weakness elsewhere. Shipments from factories rose 0.5%, while unfilled orders climbed 0.9% to $1.527 trillion, indicating sustained backlogs in many sectors.
Overall, the December data reflects a mixed picture for U.S. manufacturing amid volatile commercial aircraft bookings. While the drop in factory orders signals caution in aerospace, strength in non-transportation categories, fueled by AI-driven capital spending, suggests broader business investment remains solid. These dynamics will likely influence ongoing assessments of economic growth and industrial activity in the coming months.