New York: Orders for durable goods probably rose in January by the most in four months and home sales showed more signs of stabilising, indicating manufacturing is driving the US recovery, economists said before reports this week.
Bookings for goods meant to last several years rose 1.5 per cent last month after a 1 per cent gain, according to the median estimate of 48 economists surveyed by Bloomberg News. Combined sales of new and existing homes rose 1.1 per cent to a 5.86 million annual pace, other reports may show.
Factories will probably ratchet up production to replenish inventories and meet global demand for new equipment made by companies such as Caterpillar Inc. Further gains in home sales will depend on how Americans respond to tax incentives and how soon the economy starts to create jobs.
Capital spending
"Manufacturing is coming back pretty solidly and there is some strength in capital spending," said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. "Housing is definitely a laggard. Until we get job growth and lending eases up, we're not going to get a whole lot of lift."
The Commerce Department's durable goods report is due on February 25 in Washington. Estimates in the Bloomberg survey ranged from a decline of 0.5 per cent to a gain of 5 per cent.
Excluding demand for transportation equipment, which tends to be volatile month to month, orders probably increased 0.9 per cent after rising 1.4 per cent in December.
