New orders for durable goods dropped by 2.5% last month, the third monthly decline in a row. Excluding the volatile transportation sector, however, new orders rose slightly in December.

Fortunately, the broad trend is still encouraging. On a rolling 12-month basis, durable goods orders are still comfortably in positive territory, as the chart below shows. Yes, the trend is slowing, but that’s not surprising. The huge year-over-year gains in the recent past were destined to fall. But with today’s news that jobless claims surged last week, the onus turns to a familiar challenge: job creation.

“The December report presented evidence of slowing in both U.S. business investment and manufacturing activity,” says Cliff Waldman, economist for the Manufacturers Alliance/MAPI, via Industry Week. “Recent signs of stronger consumer demand are encouraging for U.S. economic growth prospects but significant risks remain in labor markets, housing, and state and local finances.”
The question is whether the downshift in durable goods orders and the uptick in jobless claims is a prelude to the update on January payrolls scheduled for next Friday (Feb. 4).