(RTTNews) – New orders for U.S. manufactured durable goods jumped by much more than expected in the month of October, according to a report released by the Commerce Department on Wednesday.
The report said durable goods orders shot up by 1.0 percent in October after rising by a downwardly revised 0.3 percent in September.
Economists had expected durable goods orders to climb by 0.4 percent, matching the increase that had been reported for the previous month.
“High inflation means these nominal data overstate the real strength of durable goods,” said Oren Klachkin, Lead U.S. Economist at Oxford Economics.
He added, “However, this upside surprise is the latest in a recent string of economic data that show the economy is maintaining fairly healthy momentum heading into year-end.”
The stronger than expected growth in durable goods orders was partly due to a continued surge in orders for transportation equipment, which jumped by 2.1 percent in October after spiking by 2.5 percent in September.
Orders for non-defense aircraft and parts helped lead the way higher, soaring by 7.4 percent in October after skyrocketing by 23.4 percent in September. Orders for defense aircraft and parts also showed a substantial rebound.
Excluding the surge in orders for transportation equipment, durable goods orders rose by 0.5 percent in October after slumping by 0.9 percent in September. Ex-transportation orders were expected to be unchanged.
Orders for communications equipment and computers and related products increased sharply, while orders for machinery also jumped.
The report also showed orders for non-defense capital goods excluding aircraft, a key indicator of business spending, climbed by 0.7 percent in October after sliding by 0.8 percent in September.
Shipments in the same category, which is the source data for equipment investment in GDP, shot up by 1.3 percent in October after edging down by 0.1 percent in the previous month.
“Although partly reflecting the impact of rising prices, the latter suggests business equipment investment may be set for further growth in the fourth quarter, particularly alongside a likely further pickup in motor vehicles investment,” said Andrew Hunter, Senior U.S. Economist at Capital Economics.
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