–Nov Durable Goods Orders +3.8%; Ex Transptn +0.3%; Boeing 96 Orders

By Joseph Plocek

WASHINGTON (MNI) – The U.S. November Personal Income report
suggests continued real growth in Q4, while durable goods orders show
manufacturing maintains underlying strength.

November Personal Income printed +0.1%, Personal Consumption
Expenditures +0.1%, and core PCE prices +0.1% for +1.7% over the year.
The data were weaker than expected.

But real November PCE printed +0.2%. The reason is goods prices
were down 0.2%, adding to real spending. This compares to real PCE at
+0.2% in October after revision.

The real growth in October and November PCE suggests consumption
gained in Q4. December sales strength might bolster growth further.

Private wages fell $7.1 billion in November as manufacturing and
services pay fell. But this dip followed an outsized +$37.2 billion in
October.

Rents, transfers and income receipts rose, as is usual.
Proprietors’ income fell again.

Savings weakened but the savings rate was a decent 3.5%.

December should see further buying if wages rebound, so growth
still will be strong in Q4.

Moreover, November real spending printed +1.1% in durables, -0.1%
in nondurables and +0.1% in services. This suggests on-going demand for
large goods, perhaps in the fulfilling of pent-up desires. Real durables
spending was +3.3% in September, +1.3% in October, and +1.1% in
November, a big up-trend.

In a separate report, November durable goods orders posted a
large +3.8% but were +0.3% excluding transportation and +3.7% ex
defense.

Strength was in primary metals at +5.2%, machinery at +0.9%, and in
aircraft. Other areas dipped. Computers printed -4.4% and electronics
-1.2%. Motor vehicle & parts orders were off 0.5%.

Nondefense aircraft new orders printed +73.3% as Boeing Corp.
reported 96 new orders for civilian aircraft after the Dubai air show.
This compares to 7 in October.

Defense aircraft orders printed +12.1%, adding to gains in that
sector.

Ex-transportation orders are up in six of the last seven months and
suggest manufacturing gains.

Nondefense capital goods shipments were -2.2% after +0.4% in
October, suggesting weak capital spending.

Shipments posted -0.4%, and inventories +0.6%, rounding out the
durables report.

**Market News International Washington Bureau: (202)371-2121**

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