Durable goods orders rise as business ups spending

A rebound in business spending on machinery and equipment lifted orders for long-lasting manufactured goods in December, offering more evidence that the U.S. economy is gaining some momentum at the start of the year. Orders for durable goods—products that are expected to last at least three years—rose 3% last month, the Commerce Department is reporting this morning. And so-called core capital goods, which are viewed as a good measure of business investment plans, hit an all-time high. Economists note a surge in volatile demand for commercial aircraft also boosted orders. And businesses likely stepped up spending to take advantage of a tax break on equipment, which expired at the end of December. One of the most optimistic reports in the fourth quarter came from Caterpillar, which says its profit jumped 60% on the three months ending 2011. The world’s largest maker of construction and mining equipment also issued 2012 guidance that was well above Wall Street predictions. Economists pay close attention to core capital goods, such as computers and machinery, because they are viewed as a good way of gauging business investment plans. Demand for these goods rose a solid 2.9% in December. And the increase pushed orders for core capital goods to a record $68.9 billion. Orders have climbed more than 45% since hitting a recession low in April 2009. Check out the full story by The Associated Press here.