Bookings rise nearly 10% on surge in demand for commercial jets
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — U.S. orders for long-lasting goods surged in September, mainly because of a rebound in bookings for commercial jets, but demand for manufacturing goods outside of aircraft was mixed.
The Commerce Department said durable-goods orders climbed 9.9% last month, marking the biggest gain in more than a year and a half. Orders in August had declined by the largest amount in three years.
Economists polled by MarketWatch had expected an 8.3% increase.
Orders for durable goods, or items expected to last at least three years, provide a good idea of how fast the economy is growing. Orders surge when growth accelerates and taper off when the economy softens.
The rebound from August’s steep 13.1% decline in new orders stemmed largely from higher demand for aircraft, a volatile category that often skews the overall report. Bookings surged in July after the annual Paris air show, sank in August and recovered in September, reflecting the fortunes of Boeing BA -0.98% . Read more about Boeing clearing market turbulence.
Last month, orders for aircraft leaped to $14.66 billion from a scant $535 million in August — a whopping 2,640% gain.
Yet orders for autos, another large transportation category, fell 0.4%to mark the second straight decline.
Excluding transportation, new orders for durable goods rose a much smaller 2.0% in September, a generally mixed report suggesting the U.S. manufacturing sector remains soft.
Bookings jumped 9.2% for heavy machinery and 4.1% for primary metals, but they fell for computers, electronics, electrical equipment and communications gear.
A category of orders seen as a proxy for business investment, known as core capital goods, was flat last month after rising a scant 0.2% in August. Core orders exclude defense and aircraft, whose sales can swing dramatically from month to month.
The soft level of core orders indicates companies are still hesitant to invest. A global economic slowdown and the upcoming U.S. presidential election has made it harder for businesses to plan for the future. Big spending cuts and higher taxes are slated to take effect on Jan. 1 unless Washington alters current law.
Shipments of core capital goods, a number used to help calculate quarterly gross domestic product, dipped 0.3% last month. That category fell in all three months of the third quarter.
The decline in durable-goods orders in August, meanwhile, was revised down slightly to 13.1% from 13.2%.
Jeffry Bartash is a reporter for MarketWatch in Washington.
