U.S. Durable Goods Post Biggest Jump in a Year
November 23 2016 - 09:30AM
Dow Jones News
WASHINGTON--Demand for long-lasting manufactured goods rose in
October at the fastest pace in a year, a sign the U.S. factory
sector has begun to stabilize.
Orders for durable goods—products designed to last longer than
three years, such as trucks, computers and metals— rose 4.8% to a
seasonally adjusted $239.4 billion from a month earlier, the
Commerce Department said Wednesday. Economists surveyed by The Wall
Street Journal expected a 2.7% gain in overall orders.
October's jump was driven by a near doubling in orders for
civilian aircraft, a highly volatile segment, but demand for most
other categories increased as well. When excluding orders tied to
transportation, demand increased 1%. When excluding defense, orders
rose 5.2%.
September's overall orders were revised to a 0.4% gain from a
previously estimated decline. As a result, orders have increased
for four straight months, but are still down slightly through the
first ten months of this year, compared to the same period in 2015.
Wednesday's report entirely represents activity that occurred prior
to the presidential election.
Measures of manufacturing activity had been choppy over the past
year as a strong dollar caused U.S.-made goods to be more expensive
for overseas customers.
But like recent durables orders, other data points to signs of
improvement. The Institute for Supply Management's purchasing
manufacturers' index moved more firmly into expansion territory in
October, from September. The Federal Reserve's measure of
manufacturing output rose for the fourth time in five months in
October, but the index remains slightly down from a year
earlier.
Wednesday's report showed an important proxy for business
investment, nondefense capital goods excluding aircraft, rose 0.4%
last month, but is down 4% through October, compared to the first
ten months of last year.
Inconsistent business spending has been one factor constraining
growth in gross domestic product to around 2% annually, a
lackluster rate compared to other expansions since World War
II.
Orders for machinery, computers and electrical equipment and
appliances all increased in October. Orders for motor vehicles and
parts declined.
Defense orders fell 3.7% last month. Defense orders fell the
last two months after posting strong increases in July and
August.
Orders for civilian aircraft and parts increased 94.1% in
October from September. Boeing Co., the country's largest aerospace
firm, separately reported October orders for jetliners increased to
85 in October from 55 in September. Boeing data is not adjusted for
seasonality
Write to Eric Morath at eric.morath@wsj.com and Anna Louie
Sussman at anna.sussman@wsj.com
(END) Dow Jones Newswires
November 23, 2016 09:15 ET (14:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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