October durable orders plunge

Discussion in 'Economy' started by DavidS, Nov 26, 2008.

  1. DavidS

    DavidS Anti-Tea Party Member

    Sep 7, 2008
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    October durable orders down 6.2%, transportation orders fall

    WASHINGTON (MarketWatch) -- Orders for U.S.-made durable goods fell 6.2% in October, the largest decline in two years, the Commerce Department estimated Wednesday, as orders for transportation goods fell 11.1%.

    Economists surveyed by MarketWatch had expected an overall decline of 2.5%. Excluding transportation, orders fell 4.4%.

    Orders for core capital equipment -- the kind of investments businesses make to expand or update their productive capacity -- fell 4% in October, after a 3.3% decline in September.

    October shipments fell 2.4% after a 0.2% dip in September. Excluding transportation, shipments fell 1.7% in October after a 0.9% decline in September.

    New orders for September were revised to a decline of 0.2%, compared with the prior estimate of a 0.9% gain.

    Analysts had expected a decline in durable goods orders given that the prior month's data was boosted by a short-lived gain in transportations orders. Further, there's significant auto market weakness.

    Over at IHS Global Insight, analysts had expected a decline of 5.7% in durable goods orders, with almost every major category taking a hit.
    "Everything is in retreat," according to a Global Insight note prior to the data's release.

    Analysts at CIBC World Markets were looking for a decline in new orders of 5%.

    "Despite significant underlying weakness, September's durable goods orders data benefited from a big transportation related boost," CIBC analysts wrote. "With the U.S. economy in recession, and many of its largest trading partners in no better shape, American manufacturers are in store for a number of particularly difficult months."

    Prior to Wednesday's release, analysts with J.P. Morgan had forecast a decline of 3% for new durable goods orders, citing a range of indicators that suggest weaker demand due to the recession. They also noted the Boeing strike that reduced aircraft shipments.

    "Moreover, falling commodity prices will drag down the nominal spending figures in this report," J.P. Morgan analysts wrote in a research note. End of Story

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