Durable Goods Orders Fall in October

Politics Reuters

New orders for a range of long-lasting U.S. manufactured goods unexpectedly rose in October, but sharp downward revisions to the prior month's data and weak spending plans by businesses suggested manufacturing was taking a breather.

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The Commerce Department said on Wednesday durable goods orders excluding transportation rose 0.7 percent after a downwardly revised 0.6 percent increase in September. Economists had forecast this category unchanged from the previously reported 1.8 percent rise.

But weak demand for transportation equipment saw overall orders falling 0.7 percent after declining 1.5 percent in September. Economists had forecast overall orders dropping 1.0 percent last month.

Durable goods range from toasters to big-tick items such as aircraft which are meant to last three years and more.

Overall orders were dragged down by a 4.8 percent drop in bookings for transportation equipment as orders for civilian aircraft dropped 16.4 percent last month. Boeing received only 7 orders for aircraft, according to the plane maker's website, down from 59 in September.

That overshadowed a 6.2 percent increase in orders for motor vehicles.

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Despite the rise in orders excluding transportation, the tenor of the report was weakened by a drop in non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending. The category fell 1.8 percent last month after a downwardly revised 0.9 percent rise in September.

It was the largest decline since January, when it fell 4.8 percent.

Economists had expected a drop of 0.6 percent from the previously reported 2.9 percent jump.

This category normally weakens in the first month of each quarter in part because of an incomplete seasonal adjustment of the power equipment subcomponent.

Shipments of non-defense capital goods orders excluding aircraft, which go into the calculation of gross domestic product, fell 1.1 percent after declining 1.0 percent in September.

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