MW: U.S. durable-goods orders down 3.3% in October
WASHINGTON (MarketWatch) — Orders for U.S.-made durable goods fell 3.3% in October — the largest decline since January 2009 — as transportation orders declined, the Commerce Department reported Wednesday.
Excluding transportation, new orders fell 2.7% in October — the largest decline since March 2009.
Economists polled by MarketWatch had expected a decline of 0.2% for overall durable-goods orders. See economic calendar.
Durable goods are expensive items designed to last three years or longer, and while month-to-month movements in the data are volatile, analysts see a trend in orders as a valuable leading economic indicator.
Core durable-goods orders, which are orders for capital goods excluding defense and aircraft, fell 4.5% in October after a 1.9% increase in September.
“We can safely say ... the pace of business spending is slowing,” wrote Dan Greenhaus, chief economic strategist with Miller Tabak, in a research note.
Durable-goods orders for September were revised higher to an increase of 5%, compared with a prior estimate of 3.5% growth.
Meanwhile, shipments of durable goods fell 0.9% in October, while inventories rose 0.4%, and unfilled orders rose 0.7%.
A report earlier this month from the Institute for Supply Management indicated that activity in the nation’s manufacturing sector expanded at a faster pace in October, putting the string of increases at 15 consecutive months.
Analysts at RDQ Economics wrote in a research note that the durable-goods report doesn’t signal “a significant slowdown in manufacturing activity, and we expect orders will rise in November as this saw-tooth pattern continues.”
Details
Orders for transportation equipment fell 5.2% in October, following an increase of 16.5% in September.
Orders for computers and electronic products fell 7.7%, with orders for communications equipment down 12.3%, the largest decline since September 2008.
Orders for machinery fell 3.9% in October, also a reversal after having risen 3.5% in September.
Shipments of core capital-equipment goods, a direct input into gross domestic product calculations, fell 1.5% in October after rising 1% in September.
