Orders for Durable Goods Drop for Second Time in Three Months

he Commerce Department said Nov. 24 that orders for durable goods dropped 0.4% in October, the second decline in three months.

Orders decreased to $196.3 billion after a revised 0.9% gain in September. Excluding transportation equipment, orders fell 0.7% in October, the first decline in four months, following a 2.8% increase the month before.

Durable orders, which are goods made to last at least three years, are often looked to as an indicator of future factory activity. Factory activity drives demand for transportation services, particularly trucking, which hauls finished products and components to and from production plants.

Commerce said orders for transportation equipment rose 0.3%, but bookings for motor vehicles dropped 2.8%. However, a 35.2% increase in orders for defense aircraft accounted for the overall increase.

Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, dropped 3.6%, the first decline in five months, the report said.