Executive Briefings

Durable Goods Orders Rose 4.8 Percent in October

U.S. durable goods orders rebounded strongly in October, surging past expectations amid increased demand for aircraft and other transportation machinery. The Commerce Department said orders for items meant to last three years increased $11bn, or 4.8 percent, to $239.4bn last month, following a downwardly revised 0.4 percent drop in September. Economists had predicted a 1.7 percent gain.

Orders were boosted by a near-100 percent month-on-month increase in orders for commercial aircraft, with Boeing reporting 85 orders for planes. Transportation equipment orders as a whole increased 12 percent in October.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose by 0.4 percent, after declining 1.4 percent in September. So-called core capital goods orders have now increased in four of the past five months, suggesting that manufacturing activity is picking up.

According to Reuters, the durable goods data “added to bullish reports on housing starts, home sales, retail sales and the labor market, as well as firming inflation in suggesting that the economy continued to gain speed early in the fourth quarter.”

The Atlanta Federal Reserve is forecasting GDP growth of 3.6 percent in the fourth quarter, compared to a 2.9 percent pace in the July-September period.

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Orders were boosted by a near-100 percent month-on-month increase in orders for commercial aircraft, with Boeing reporting 85 orders for planes. Transportation equipment orders as a whole increased 12 percent in October.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose by 0.4 percent, after declining 1.4 percent in September. So-called core capital goods orders have now increased in four of the past five months, suggesting that manufacturing activity is picking up.

According to Reuters, the durable goods data “added to bullish reports on housing starts, home sales, retail sales and the labor market, as well as firming inflation in suggesting that the economy continued to gain speed early in the fourth quarter.”

The Atlanta Federal Reserve is forecasting GDP growth of 3.6 percent in the fourth quarter, compared to a 2.9 percent pace in the July-September period.

Read Full Article