Durable Goods Orders Drop 2% in October


A gauge of planned U.S. business spending on capital goods unexpectedly fell in October and new orders for long-lasting manufactured goods were down, pointing to a loss of momentum in factory activity.

The Commerce Department said on Wednesday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dropped 1.2 percent last month.

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It was the second month of declines after orders for these so-called core capital goods fell 1.4 percent in September. Economists polled by Reuters had expected this category to increase 0.6 percent.

The unexpected drop in these orders suggested some ebbing in the manufacturing sector's recently found strength. It could also be an indication that a 16-day partial government shutdown last month hurt business confidence.

Orders for durable goods - items from toasters to aircraft that are meant to last at least three years - fell 2 percent, largely because demand for civilian and defense aircraft tumbled.

Durable goods orders had increased 4.1 percent in September.

The tone of the report was generally mixed, with gains in new orders for primary metals, computer and electronic products, motor vehicles and electrical equipment, appliances and components.

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