October 25, 2017 10:00 AM, EDT

Gain in Equipment Orders Underscores Robust US Investment

Daniel Acker/Bloomberg News

U.S. orders for business equipment increased more than forecast in September, indicating solid investment momentum as the third quarter drew to a close, Commerce Department figures showed Oct. 25.

Highlights of September Durable Goods

• Non-military capital goods orders excluding aircraft climbed 1.3% (estimated 0.3% gain) for a third straight month.

• Shipments of those goods, which are used to calculate gross domestic product, rose 0.7% (estimated 0.1% gain) after a revised 1.2% advance.

• Bookings for all durable goods jumped 2.2% (estimated 1% advance) following 2% increase.

• Excluding transportation-equipment demand, which is volatile, orders rose 0.7% for a second month

Key Takeaways

The 11.6% annualized gain in sales of core capital goods from July through September was the strongest pace in three years, indicating firmer investment in equipment probably boosted third quarter economic growth.

Shipments of capital goods excluding aircraft and military equipment rose an annualized 10.6% in the three months ended in September. Those figures feed into calculations for third-quarter gross domestic product; GDP data are due Oct. 26.

The September advance in durable goods orders was fairly broad- based with gains in fabricated metals, electronics, communications equipment and commercial aircraft. Boeing Co., the Chicago-based aerospace company, said it received 72 orders for aircraft in September, up from 33 the prior month.

Other Details

• Orders for communications equipment rose 4.8%, those for computers and electronic products increased 1.6% and bookings for fabricated metals advanced 1.7%.

• Bookings for civilian aircraft and parts jumped 31.5% after a 33.5% surge; defense capital-goods orders rose 4.1%.

• Orders for motor vehicles and parts rose 0.1%, after 2.8% increase; industry figures showed cars and light trucks sold in September at the fastest annualized rate since 2005.

• Durable goods inventories climbed 0.6% in September, the most since June 2015 and a sign that stockpiles will add to third-quarter growth.

• In its durable goods report for August, the government had said in a special note that it couldn’t isolate the effects of hurricanes.

With assistance by Jordan Yadoo