FX.co ★ U.S. Durable Goods Orders Rise 0.2% In October, Less Than Expected

The Commerce Department unveiled its latest findings on Wednesday, revealing that new orders for U.S. manufactured durable goods in October increased to a lesser degree than anticipated. According to the report, durable goods orders made a modest rise of 0.2 percent in October, following a revised decline of 0.4 percent in September. Economists had projected a 0.5 percent increase, contrasting with the initially reported 0.7 percent drop from the previous month.

This slight increase in durable goods orders can partly be attributed to a recovery in transportation orders, which grew by 0.5 percent in October after a 1.9 percent fall in September. This resurgence was primarily driven by orders for aircraft and parts. Excluding transportation, durable goods orders saw a marginal rise of 0.1 percent in October, succeeding a 0.4 percent increase in September. Analysts had expected a 0.2 percent uptick in these ex-transportation orders.

Breaking down sector specifics, orders for communications equipment, as well as electrical equipment, appliances, and components, surged by 1.3 percent. Conversely, orders for computers and related products experienced a significant drop of 2.5 percent.

The report also highlighted a decline in orders for non-defense capital goods excluding aircraft—a crucial marker for business investment—which slipped by 0.2 percent in October. This follows a 0.3 percent increase in September. Bernard Yaros, the US Lead Economist at Oxford Economics, remarked, "Core orders, which serve as a better predictor of future capital spending by enterprises, fell more than anticipated, even against our below-consensus forecast." He further suggested, "Heightened policy uncertainty leading up to the election likely contributes to this weakness."

In terms of shipments, which feed into equipment investment data for GDP calculations, there was a 0.2 percent increase in October, following a slight 0.1 percent decrease in September.