WASHINGTON (Reuters) – Orders for long-lasting U.S. manufactured goods surged in November, boosted by aircraft bookings, but business spending on equipment appeared lackluster amid higher borrowing costs.
The Commerce Department’s Census Bureau said on Friday that orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, jumped 5.4% last month. Data for October was revised higher to show orders falling 5.1% instead of 5.4% as previously reported.
Economists polled by Reuters had forecast durable goods orders rebounding 2.2%. Orders increased 4.5% on a year-over-year basis in November.
Manufacturing, which accounts for 10.3% of the economy, continues to be hamstrung by higher interest rates. Despite an easing in financial conditions and prospects of rate cuts next year, activity is likely to remain tepid amid signs that businesses are throttling back on inventory accumulation in anticipation of softer demand.
Transportation equipment orders rebounded 15.3% last month after declining 13.4% in October. Motor vehicle and parts orders rebounded 2.8% as strikes by the United Auto Workers ended.
Civilian aircraft orders soared 80.1%. Boeing reported on its website that it had received 114 orders for civilian aircraft, 90 of them the more expensive 777X series. That compared to 123 orders in October.
There were increases in orders for electrical equipment, appliances and components, primary metals, machinery as well as computers and electronic products.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rebounded 0.8% after a downwardly revised 0.6% drop in the prior month. These so-called core capital goods orders were previously reported to have declined 0.3% in October.
Core capital goods shipments dipped 0.1% for a second straight month. Shipments of non-defense capital goods increased 0.5% following a 0.3% drop in the prior month.
These shipments feed into the calculation of equipment spending in the gross domestic product report. Business spending on equipment spending contracted in the third quarter. The economy grew at a 4.9% annualized rate last quarter.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
