Aircraft demand slams durable goods orders (biggest slump in 5½ years)

[Bush_Eats_Beef]

Aircraft demand slams durable goods orders
U.S. orders for factory goods see biggest slump in 5½ years in January

Updated: 8:45 a.m. ET Feb. 24, 2006

WASHINGTON - Orders to U.S. factories for big-ticket manufactured goods fell by the largest amount in 5½ years in January as demand for commercial aircraft suffered the biggest setback in seven years, the government reported Friday.

The Commerce Department said that orders for durable goods, everything from computers to cars, fell by 10.2 percent last month, a much bigger decline than had been expected.

The weakness was led by a 68.2 percent drop in orders for commercial aircraft reflecting a falloff in sales at Boeing Corp. after two very strong months. Analysts said the overall decline overstated the weakness in manufacturing because it was so heavily influenced by the volatile aircraft sector. Excluding airplanes, cars and other transportation products, orders posted a solid 0.6 percent rise after an even larger 1.9 percent increase in December.

While the economy slowed dramatically to a growth rate of just 1.1 percent in the final three months of last year, economists are looking for a sizable rebound in the first three months of 2006, with some forecasting growth will top 5 percent at an annual rate.

http://www.msnbc.msn.com/id/11539501/

[hatrack]

1. Were economists surprised?

Just checking!

[tanyev]

2. Real economists, or Kool-Aid drinking economists?

[hatrack]

3. I didn't know the former category existed

Let me rephrase that - I've never seen members of the former category on TV or heard them on the radio, that's for sure.

[Kolesar]

4. Why would a company order a product that won't have fuel in 17 years?

Practically speaking. Airliners typically fly 400,000 to 800,000 hours over a period of two decades. The outlook for energy prices is stratospheric, and these beauteous streamliners are headed for the museum.

Just some daily doldrums from your favorite nabob.

[Jane Austin]

5. People must be running out of that second-mortgage/ refinancing money

they got from DiTech.

That and credit cards are what a lot of people are living on.