Partly reflecting a rebound in orders for transportation equipment, the Commerce Department released a report on Tuesday showing new orders for U.S. manufactured durable goods jumped by much more than expected in the month of September.
The report said durable goods orders surged up by 1.9 percent in September after rising by rising by 0.4 percent in August. Economists had expected durable goods orders to increase by 0.5 percent.
The much stronger than expected growth in durable goods orders came as orders for transportation equipment soared by 4.1 percent in September after slumping by 0.9 percent in August.
Excluding the spike in orders for transportation equipment, durable goods orders climbed by 0.8 percent in September compared to a 1.0 percent jump in the previous month. Ex-transportation orders were expected to rise by 0.4 percent.
Orders for primary metals showed a substantial increase, while orders for fabricated metal products and communications equipment also saw notable growth.
On the other hand, the report showed sharp drops in orders for electrical equipment, appliances and components and computer and related products.
The Commerce Department said orders for non-defense capital goods excluding aircraft, a closely watched reading on business spending, increased by 1.0 percent in September after jumping by 2.1 percent in August.
“The stronger-than-expected rise in durable goods orders in September is encouraging, but future gains will likely be more modest as the health crisis drags on the economic recovery,” said Oren Klachkin, Lead U.S. Economist at Oxford Economics.
He added, “A jump in transportation orders underpinned the 1.9% rise in headline orders last month, while the other main categories signal that the economy is in a more fragile state without the boost from fiscal support.”
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