Manufactured Goods Orders Rise Firm 1.1%
Orders for manufactured goods rose a surprisingly strong 1.1% in October, while worker productivity in the July-September quarter rose a sharp 3.6%, the government reported today.
The Commerce Department said total orders for durable and non-durable goods climbed to $208.9 billion, up $2.2 billion from the September level as demand for manufactured goods appeared to suffer no initial adverse effect from the Oct. 19 collapse of the stock market.
The 1.1% increase followed a 1.8% advance in September.
Much of the strength in October came from a 7.5% rise in orders for transportation equipment, the first increase in this key sector since May and the biggest advance since a 10.8% March increase.
Excluding orders for defense goods, which vary widely from month-to-month, new factory orders rose by 0.7% in the month, the department said.
Many financial analysts had expected U.S. factory orders to decline by about 0.3%. The October report does not assess the full impact of the Oct. 19 stock market crash, and some analysts have said they expect U.S. factory orders to tail off dramatically in November and December.
But the strong rise in October orders was likely to be cited as further evidence by the Reagan Administration that the market turmoil had little effect on the overall economy.
Stock Swings a ‘Correction’
While some economists have expressed fears that the country could topple into a recession next year because of the jolt to consumer confidence, the Administration has maintained that the stock declines were merely a correction by an overvalued market and no sign of underlying weakness in the economy.
The separate Labor Department report today said productivity in the nation’s nonfarming businesses in the third quarter was much higher than had been estimated previously.