U.S. Durable Orders Climb in October
November 25 2015 - 9:20AM
Dow Jones News
WASHINGTON—Orders for long-lasting goods rose in October, a sign
demand for manufactured products could be firming after falling for
most of the year.
New orders for durable goods—refrigerators, combines and other
products designed to last at least three years— increased a
seasonally adjusted 3% in October from a month earlier, the
Commerce Department said Wednesday.
Economists surveyed by The Wall Street Journal had expected
overall orders to increase by 1.8% in October. September
durable-goods orders were revised to a 0.8% decrease from the
previously estimated drop of 1.2%.
Through the first 10 months of the year, durable-goods orders
were down 4.2% compared with the same period in 2014. The downturn
reflects curtailed demand due to low oil prices, a strong dollar
and slow overseas growth.
In October, orders for nondefense aircraft rose 81% to bolster
the overall reading. Boeing Co., the nation's largest aerospace
firm, said orders for passenger jets doubled last month compared
with September, on a nonseasonally adjusted basis.
Orders for motor vehicles and parts—which had been a bright spot
among lackluster manufacturing figures this year—fell 2.9% in
October.
Excluding transportation, durable-goods orders were up a more
modest 0.5% last month, though the gain was the best since June.
Orders outside of transportation were down 2.7% through the first
10 months of the year.
Excluding defense, another volatile sector, durable orders were
up 3.2% last month, but down 4% so far this year. Defense orders
increased 1% in October.
A key measure of business investment rose in October. Orders for
nondefense capital goods excluding aircraft—a proxy for company
spending on equipment—increased 1.3% in October. The figure was
down 3.8% through the first 10 months of the year.
Business investment peaked in September 2014 but has since
trended lower, in part reflecting a hefty drop in spending on oil-
and gas-field machinery. Orders for railroad equipment, another
category tied to oil and gas production, and farm equipment have
also slumped this year.
A stronger U.S. dollar and weak overseas demand may have also
constrained sales, but better demand this month might suggest the
effect is fading. Orders for machinery and computers increased last
month. The stronger dollar makes U.S. products more expensive
abroad and foreign goods cheaper at home.
Other measures of manufacturing have been mixed recently. The
Institute for Supply Management's manufacturing purchasing managers
index barely remained in expansion territory last month. But the
manufacturing component of the Federal Reserve's industrial
production index increased in 0.4% October, the best gain since
July.
Manufacturing represents a fairly small slice of the overall
U.S. economy, but the category is closely watched for the signals
it sends about broader demand. With the global economy uneven U.S.
factories need to sell products to domestic customers. In a
potentially worrying sign, consumer spending slowed in October
despite solid income gains, according to a separate Commerce
report.
Write to Eric Morath at eric.morath@wsj.com and Jeffrey
Sparshott at jeffrey.sparshott@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 25, 2015 09:05 ET (14:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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