Defense Spending Contributes To Factory Goods Order Surge

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WASHINGTON, DC — Factory goods orders are surging one-point-eight percent, the largest increase in almost a year and a half. Demand for defense aircraft helped lead the surge in December.

Economists were expecting an increase of one-point-two percent. There are some warning signs in the numbers released by the Commerce Department.

Businesses are spending less on equipment despite overall confidence improving. Boeing is still not producing its 737 MAX planes and the coronavirus outbreak threatens supply chains around the world.

Last November, durable goods orders had its biggest decline in six months. According to the Commerce Department, orders sank two percent even as economists predicted a gain of 1.1 percent.

Durable goods orders in October were revised to be .02 percent lower. A decline of defense aircraft and parts, transportation equipment, and cars and parts helped push orders lower.

Last October, The Defense Department announced it’s moving forward with the purchase of 478 additional F-35 Lightning II airplanes.

Officials announced the $34 billion dollar deal with aircraft manufacturer Lockheed Martin. Ellen M. Lord, undersecretary of defense for acquisition and sustainment says the F-35s will form the backbone of the U.S. and allied fifth generation inventory for the foreseeable future.

According to Air Force Lt. Gen. Eric T. Fick, the F-35 program executive officer, the three lots in the agreement will deliver 478 aircraft, 351 of which are the F-35A aircraft for the Air Force, 86 are the F-35B aircraft, for the Marine Corps, and 41 of the F-35C aircraft for carrier-based operations.

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