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October Durable Goods Orders Rise on Transportation

Bill Koenig
By Bill Koenig Senior Editor, SME Media

New orders for durable goods climbed in October, paced by transportation equipment, the U.S. Commerce Department said today.

Orders rose 1 percent to $277.4 billion, according to a monthly report. That followed a revised 0.3 percent increase in September. October was the seventh gain in the past eight months.

Excluding transportation, new orders rose 0.5 percent. Excluding defense, new orders increased 0.8 percent.

The transportation category gained 2.1 percent to $97.8 billion. The sector has posted increases in six of the past seven months.

Within transportation, orders for commercial aircraft and parts rose 7.4 percent to $19.8 billion. The industry has benefited from a recovery in demand for air travel. In the early stages of the COVID-19 pandemic, airlines canceled orders for new planes.

Orders for defense aircraft and parts soared 22 percent in October to $5.4 billion.

Motor vehicles and parts saw orders increase 0.6 percent last month to $61.8 billion. Demand for trucks, SUVs and crossovers has remained strong. The industry has worked to smooth out production difficulties caused by a continuing shortage of computer chips.

In other categories, orders for machinery gained 1.5 percent to $39.3 billion. Orders for fabricated metal products rose 0.1 percent to $36.5 billion. Orders for primary metals slipped 0.1 percent to $20.3 billion.

Durable goods orders are an indicator of the health of manufacturing generally. The increases in orders have occurred despite how the Federal Reserve has increased interest rates. The Fed has boosted rates to cool down inflation.

The monthly report is based on a survey of about 3,100 companies.

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