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The U.S Census Bureau reported that new orders for durable goods increased 0.2% to a seasonally adjusted $245.3 billion in December. Up for the eighth consecutive month, the figures follow an upwardly revised 1.2% increase in November. New orders for transportation equipment weighed heavily, falling 1% as orders related to commercial aircraft dropped after spiking 1.9% in November. Core capital goods orders which exclude aircraft and military hardware increased 0.6% in December to $71.8 billion, following a 1% increase in November. Excluding transportation, overall orders were up 0.7%. Shipments of core capital goods increased 0.5% in December finishing a 17.1% pace for the fourth quarter, after a 33.4% pace for the third quarter.
The Commerce Department’s first estimate on fourth-quarter gross domestic product (GDP) growth reported the economy expanded at an annual rate of 4.0%. Increases in exports, nonresidential fixed investment, consumer spending, residential investment, and inventories contributed positively, while declines in government spending at the federal, state, and local levels held back the economy. Personal consumption increased at only a 2.5% annualized rate in the fourth quarter as retail sales fell on a month-over-month basis in October, November, and December. Government spending and investment dropped by 1.2%, mainly due to an 8.4% fall in nondefense spending. Full-year GDP declined 3.5% in 2020 and by 2.5% from the fourth quarter of 2019, the first economic contraction since 2009 and the worst since at least the end of 1946.
The Labor Department reported the advance figure for seasonally adjusted initial claims dropped to 847,000 for the week ending January 23rd, a decrease over the previous week's revised 914,000. The 4-week moving average ticked up to 868,000 over the previous week’s 851,750. Despite the decline, the initial claims figure is still more than four times pre-pandemic levels. The largest increases in initial claims were in Florida (+8,643), Maryland (+7,935), Kansas (+6,746), Ohio (+5,665), and Rhode Island (+2,998), while the largest decreases were in California (-65,383), New York (-10,936), Texas (-9,170), Pennsylvania (-8,503), and Washington (-7,877). Continuing claims for the week ending January 16th fell by 203,000 to a pandemic level low of 4.77 million. Some 70 million or about 40% of the labor force, have filed for unemployment benefits during the pandemic. Nearly 4.8 million Americans are continuing to receive traditional state unemployment. The total number of people receiving unemployment benefits rose to 18.28 million, an increase of 2.29 million over the prior week, some 10.5 million are receiving aid from extended relief programs.
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