A jump in aircraft orders drove new orders for durable manufactured goods sharply higher in September, but not enough to offset the previous month's plunge, the Commerce Department reported Thursday.
Orders for durable goods -- products expected to last at least three years -- rose 9.9% from August, well above the average analyst estimate of 8%.
The monthly gain was the largest since January 2010, and the fourth in the last five months, following a steep 13.1% drop in August.
The surge in September orders was driven by a rebound in commercial aircraft orders, whose plunge in the prior month had dragged the headline number lower. Aircraft orders tend to be especially volatile month-over-month.
“Much of the September increase was due to new orders for transportation equipment, which increased by 31.7%,” said Donald A. Norman, senior economist for the Manufacturers Alliance for Productivity and Innovation. “Excluding transportation, new orders increased 2%, reversing the 2.1% decline from July to August. The monthly series on durable goods orders is often volatile because new orders can arrive, or disappear, in big blocks. New orders for durable goods have increased in four of the last five months. The overall trend in new orders this year indicates that while manufacturing sector activity has slowed, it nonetheless continues to expand.
“Industry groups reporting the largest gains in new orders in September included primary metals (up 4.1%), machinery (up 9.2%), and, as noted above, transportation equipment,” Norman noted. “Industries that saw orders decline included computers and electronic products (down 2.5%) and electrical equipment (down 2.7%). Orders for motor vehicles and parts were down 0.4%, an improvement from August when they were down 11.6%.”
Copyright Agence France-Presse, 2012, IW Staff