New orders for durable goods decreased much more than expected in October on the back of a sharp fall in orders in the transportation sector, data showed on Nov. 24.
Orders for manufactured goods -- big-ticket items such as planes, cars, refrigerators and computers -- decreased $6.8 billion or 3.3% to $196.8 billion last month, the Commerce Department said.
The decline follows a strong rise in orders in September, revised up to 5%, and represents the worst figure since January.
"Today's report on new orders for capital goods confirms a deceleration in the rate of growth all across the board of long lasting manufactured goods," said Thomas Duesterberg, CEO of the Manufacturers Alliance/MAPI. "While the year over year data is still strong -- new orders are up almost 15%--recent trends show that the rapid inventory accumulation that help drive up the rate of growth is clearly slowing. The overall trend in capital investment, driven largely by replacement of old equipment, is also showing signs of a pause. Looking ahead, further growth will have to be driven by improvements in exports and in capital investment, which in turn could be stimulated by a better jobs picture and stability in the tax environment."