U.S. Durable Goods Orders Tumble Amid Sharp Pullback In Aircraft Demand

(RTTNews) - After reporting a spike in new orders for U.S. manufactured durable goods in the previous month, the Commerce Department released a report on Wednesday showing durable goods orders pulled back by much more than expected in the month of October.

The Commerce Department said durable goods orders plunged by 5.4 percent in October after jumping by a downwardly revised 4.0 percent in September.

Economists had expected durable goods orders to tumble by 3.1 percent compared to the 4.6 percent surge that had been reported for the previous month.

The sharp pullback in durable goods orders came as orders for transportation equipment plummeted by 14.8 percent in October after spiking by 11.6 percent in September.

Orders for non-defense aircraft and parts led the pullback, diving by 14.8 percent in October after soaring by 11.6 percent in the previous month.

Excluding the steep drop in orders for transportation equipment, durable goods orders were virtually unchanged in October after edging up by 0.2 percent in September. Ex-transportation orders were expected to inch up by 0.1 percent.

Increases in orders for fabricated metal products and computers and electronic products were offset by decreases in orders for primary metals and electrical equipment, appliances and components.

The Commerce Department also said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, edged down by 0.1 percent in October after a revised 0.2 percent dip in September.

Meanwhile, shipments in the same category, which is the source data for equipment investment in GDP, came in unchanged for the second consecutive month.