Demand for long-lasting U.S. factory goods remained robust last month, pointing to ongoing strong business investment.
New orders for durable goods--products designed to last at least three years, like dishwashers and aircraft--rose a seasonally adjusted 2.2% in September from a month earlier, the Commerce Department said Wednesday. New orders are up 5.2% in the first nine months of this year compared to the same period in 2016.
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Economists surveyed by The Wall Street Journal had expected overall orders to increase 0.8% in September from the prior month.
The rise in new orders for all durable goods follows a robust 2.0% rise in August. The latest data show manufacturers in the U.S. headed into the fourth quarter on a strong footing. September's rise in durable goods orders reflects ongoing investment by businesses in new capital goods like transportation equipment, capital goods and communications equipment, suggesting optimism about the economy.
Transportation equipment orders led September's increase, rising 5.1%, the biggest increase since June. A volatile category, orders for civilian airplanes and parts, rose 31.5%, after strong gains in August too. Excluding the transportation segment, orders rose 0.7% in September.
New orders for nondefense capital goods excluding aircraft, considered a proxy for business spending on equipment, rose 1.3%. Durable goods statistics are volatile and subject to large revisions.
The report comes amid broadly positive signs from the U.S. manufacturing sector, despite the impact of three recent major Atlantic hurricanes-Harvey, Irma and Maria.
The Commerce Department this month reiterated that it couldn't isolate the effects of Hurricanes Harvey and Irma, which hit the U.S. in late August and September. The Federal Reserve earlier said that Hurricane Harvey contributed to a sharp decline in U.S. industrial production in August, but output rebounded in September.
The Commerce Department's durable goods orders report can be found at http://www.census.gov/manufacturing/m3.
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(END) Dow Jones Newswires
October 25, 2017 08:45 ET (12:45 GMT)