Durable goods orders rise, business spending cools
WASHINGTON — A surge in demand for commercial aircraft lifted orders for big-ticket manufactured goods in September, but businesses spent less on products that would signal expansion.
The Commerce Department said orders for durable goods rose 3.3 percent last month. Overall, it was the best showing since January. But excluding transportation, orders fell 0.8 percent after having risen 1.9 percent in August.
And spending by companies on capital goods excluding aircraft dropped 0.6 percent after rising 4.8 percent in August. The category, viewed as a good proxy for business investment, has declined in two of the past three months.
The new report suggests manufacturing is moving forward, but at a slower pace.
Factories helped boost the economy after the recession ended, filling orders from businesses that moved to rebuild their stockpiles.
Sal Guatieri, a senior economist with BMO Capital Markets, said, “The next leg of the recovery will increasingly rest on the shoulders of consumers.’’
Business capital spending on equipment has been one of the bright spots so far in the recovery. It grew at double-digit annual rates since the final three months of last year.
Demand for transportation equipment jumped 15.7 percent, the best showing since January. But it is a volatile category that had fallen 8.8 percent in August.
The overall economy is expected to show growth of around 2 percent in the July-September quarter. The government will release its first look at the third quarter tomorrow.