Orders for U.S. durable goods increase on aircraft demand

Orders for U.S. durable goods rose in September by the most in three months as stronger demand for commercial and military aircraft outweighed a drop in business equipment.

Bookings for goods meant to last at least three years increased 3.7% after a revised 0.2% gain in August, the Commerce Department said today in Washington. The median forecast of 67 economists surveyed by Bloomberg called for a 2.3% advance. A gauge of demand for capital equipment slumped 1.1%, a sign companies pulled back ahead of the partial federal government shutdown.

“Investment spending has been really soft this year,” Joshua Dennerlein, an economist at Bank of America Corp. in New York, said before the report. “You’d expect to see rip-roaring investment because the groundwork is there, but you keep getting these uncertainty shocks, these policy shocks. People are going to hold off on investment because they’re not really sure.”

Stock-index futures were little changed after the figures, with the contract on the Standard & Poor’s 500 Index expiring in December falling less than 0.1% to 1,748.1 at 8:35 a.m. in New York.

Faster growth in manufacturing, which accounts for about 12% of the economy, depends on how quickly confidence is restored in the aftermath of a budget battle that shut down the government for half of this month. Results from Ford Motor Co. and Whirlpool Corp. show stronger domestic auto and housing markets remain sources of strength for the expansion.

Minus Transportation

Orders excluding transportation equipment, where demand is often volatile month to month, fell 0.1% after a 0.4% decrease in August.

Forecasts for total durable goods orders in the Bloomberg survey of economists ranged from a 0.3% decline to a 7.5% increase after a previously reported 0.1% advance in August.

Demand for non-defense capital goods excluding aircraft decreased in September after a 0.4% gain in August and a 3.5% slump in July. Such orders are considered a proxy for future business investment in computers, electronics and other equipment.

Shipments of those products, a measure used to calculate gross domestic product, fell 0.2% in September after rising 1.1% the prior month. Sales were down 2.9% over the past three months at an annualized rate, compared with a 0.9% decline at the end of the second quarter.

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