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U.S. durable orders rise
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January 26, 2001: 9:09 a.m. ET
Orders for durable goods rose 2.2% in December versus forecasts for decline
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NEW YORK (CNNfn) - Orders for cars, computers and other long-lasting goods rose a surprising 2.2 percent in December, the U.S. government said Friday, fueled by surging demand for airplanes and electronic equipment.
The Commerce Department reported that orders for durable goods – big-ticket items expected to last at least three years – rose to a seasonally adjusted $214.3 billion last month, following a revised 1.8 percent rise in November. The November increase initially was reported at 2.5 percent.
The 2.2 percent increase last month was the biggest gain since an identical increase in September.
Wall Street economists, tracking the slowing economy, had forecast a decline of 1.5 percent for December. The durable goods number is volatile and can fluctuate widely from month to month.
Orders for transportation equipment posted the biggest gain, jumping 14.6 percent amid strong demand for equipment in the aviation sector. In November, transportation orders rose 7.3 percent.
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Excluding the transportation sector, durable goods orders fell 1.4 percent from a revised 0.3 percent gain in November.
Orders for electronic and other electrical equipment rose 2.4 percent in
December, following a 6.7 percent rise in the prior month. However, industrial machinery orders, including computers and machine tools, fell 5.3 percent last month, on top of a 0.3 percent decline in November.
For all of 2000, durable goods orders rose 6.5 percent, down from a 7.3 percent increase in 1999.
While Friday's report contained some good news for manufacturers, the industry has been particularly hard-hit by the rapidly slowing economy. Last week, the Federal Reserve reported that factory production fell 1.1 percent in December, the biggest one-month drop since March 1991, when the last recession was ending.
Worried that the economy could again fall into recession, the Federal Reserve cut interest rates by a half percentage point Jan. 3 in a surprise move. Another cut could come next week, when Fed policy makers gather to consider the nation's economic health in a regularly scheduled meeting Jan. 30-31.
Central bank Chairman Alan Greenspan told Congress on Thursday that economic growth is slowing, a hint that more rate cuts may be on the way.
-- from staff and wire reports 
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