Orders for long-lasting factory goods grew much more quickly than expected in September, rising 1.9 percent to $237.1 billion, data from the Census Bureau showed Tuesday.
Economists had expected a rise of 0.4 percent, in line with the previous month’s reading.
Durable goods orders are new orders placed with domestic manufacturers for factory goods expected to last three-years or more. They include cars, trucks, household appliances, office furniture, computers, machinery, boats, and even aircraft.
Excluding transportation, new orders increased 0.8 percent.
Orders for core capital goods, a proxy for business investment that excludes defense and aircraft, rose 1.0 percent. Excluding only defense spending, new orders rose 3.4 percent.
Transportation equipment, which has been up now for 4 out of the last five months, rose 4.1 percent, a $3 billion increase to $76.8 billion. Orders for new cars and trucks—which have been very strong in the wake of the lockdowns and the crash of gasoline prices—rose 1.5 percent.
Orders for primary metals, which includes steel and aluminum, jumped 4.0 percent. Orders for fabricated metal products rose 1.2 percent.
Factory orders for durable goods are an indicator of the strength of demand. This was the fifth consecutive monthly increase demand and one that many expected could come in on the weak side due to the lack of stimulus spending coming out of Washington, D.C. Despite the post-lockdown rise, year to date orders are down 10.1 percent.
The stronger than expected figures for September will likely boost estimates for third-quarter GDP. The GDP report will be released Thursday.