Downward revisions to capital goods shipments offset to a degree the strong 1.7 percent headline gain for December factory orders. Shipments of nondefense capital goods excluding aircraft, which will be inputs into the second estimate for fourth-quarter GDP, are revised 2 tenths lower in December to a still solid 0.4 percent gain and 1 tenth lower for November to a 0.3 percent increase. This will pull down what was a solid showing for nonresidential fixed investment in last week's first estimate for fourth-quarter GDP.
Other data in today's report include a 1 tenth downward revision in December durable orders to a still very strong gain of 2.8 percent and an initial reading of plus 0.7 percent for nondurable orders led by petroleum and coal products.
Orders on the durables side are led once again by civilian aircraft but also include good showings for vehicles, primary metals, fabrications, and machinery. But orders for core capital goods, like shipments, are revised lower, down 0.6 percent in December and up only 0.1 percent in November both of which point to a slow start for 2018 business investment.
Nevertheless, today's report is consistent with a factory sector that, despite mixed signals like the capital goods data or the dip in manufacturing hours in this morning's employment report, is probably accelerating into the new year. This is underscored by year-on-year growth for durable orders which has been sloping higher, to 11.5 percent in December from 8.7 percent in November.