U.S. Durable Goods Orders Jump 1.0% In October, Much More Than Expected
23 November 2022 - 8:14PM
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New orders for U.S. manufactured durable goods jumped by much
more than expected in the month of October, according to a report
released by the Commerce Department on Wednesday.
The report said durable goods orders shot up by 1.0 percent in
October after rising by a downwardly revised 0.3 percent in
September.
Economists had expected durable goods orders to climb by 0.4
percent, matching the increase that had been reported for the
previous month.
"High inflation means these nominal data overstate the real
strength of durable goods," said Oren Klachkin, Lead U.S. Economist
at Oxford Economics.
He added, "However, this upside surprise is the latest in a
recent string of economic data that show the economy is maintaining
fairly healthy momentum heading into year-end."
The stronger than expected growth in durable goods orders was
partly due to a continued surge in orders for transportation
equipment, which jumped by 2.1 percent in October after spiking by
2.5 percent in September.
Orders for non-defense aircraft and parts helped lead the way
higher, soaring by 7.4 percent in October after skyrocketing by
23.4 percent in September. Orders for defense aircraft and parts
also showed a substantial rebound.
Excluding the surge in orders for transportation equipment,
durable goods orders rose by 0.5 percent in October after slumping
by 0.9 percent in September. Ex-transportation orders were expected
to be unchanged.
Orders for communications equipment and computers and related
products increased sharply, while orders for machinery also
jumped.
The report also showed orders for non-defense capital goods
excluding aircraft, a key indicator of business spending, climbed
by 0.7 percent in October after sliding by 0.8 percent in
September.
Shipments in the same category, which is the source data for
equipment investment in GDP, shot up by 1.3 percent in October
after edging down by 0.1 percent in the previous month.
"Although partly reflecting the impact of rising prices, the
latter suggests business equipment investment may be set for
further growth in the fourth quarter, particularly alongside a
likely further pickup in motor vehicles investment," said Andrew
Hunter, Senior U.S. Economist at Capital Economics.
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