Durable Goods Orders Post Unexpected Rise In September

October 29, 2008 2:11 p.m. EST

Washington, DC (AHN) - The Commerce Department said Wednesday that orders for durable goods rose by 0.8 percent in September. The advance was well ahead of economists expectations for a decline and marked the strongest move since June.

Economists had expected a 1.2 percent drop following a record 5.5 percent drop in August. However, a strong increase in orders for aircrafts, up 29.7 percent and transportation equipment, up 6.3 percent, fueled a rise in overall durable goods orders.

In a surprise to the upside, orders for motor vehicles rose 3 percent in September.

Excluding transportation, orders fell 1.1 percent. Orders were weak for computers and electronic products, down 1.4 percent. Primary metals were also weak, down 4.5 percent.

Widely watched as a barometer of planned business investments; non-defense capital goods orders excluding aircrafts fell 1.4 percent. This marks the second consecutive month of decline as businesses ease back on capital investments.

"The deepening U.S. recession, a still-encumbered credit creation process and slowing export sales owing to the global economic downturn point to a much weaker trend for duable goods orders," said Michael Gregory, an economist at BMO Capital Markets, according to the Associated Press.