Orders for Durable Goods Climb 2.4%

A jump in demand for transportation equipment in October pushed durable goods orders up 2.4% last month after a revised 2.9% drop in September, the Commerce Department said Wednesday.

Although the increase was well above predictions of about a 1.7% increase, most analysts said the underlying figures pointed to a rather flat economy.

Excluding orders for transportation equipment, orders were up only 0.1% in October after slipping 0.4% the previous month, the department said.

Furthermore, excluding the volatile military equipment segment, durable goods orders fell 0.2% last month after falling 2.5% in September, it said.

“Orders seem to be going sideways if not possibly down,” said Cynthia Latta, senior financial economist with Data Resources Inc. of Lexington, Mass.

“It’s another indication that growth is slowing down, and I think that’s basically a good thing,” Latta said.

The financial markets, which have been concerned that the economy may be growing too rapidly, resulting in higher inflation, reacted calmly to the report.

Wall Street’s Dow Jones industrial index ended 14.58 points higher at 2,092.28, while U.S. Treasury bond prices, which are highly sensitive to signs of inflation, finished up slightly.

The October rise in durable goods orders brought the value of orders for expensive manufactured products, “big ticket” items ranging from toasters to tanks, to a seasonally adjusted $122.08 billion, the Commerce Department said.

Orders for transportation goods, including aircraft and some military equipment, surged 8.9% in October after falling 9.1% in September.

The decline in overall orders for September, previously reported as a 3.2% drop, had led economists to believe that U.S. economic growth was tapering off.

Tom Runiewicz, a senior economist with WEFA Group of Bala-Cynwyd, Pa., said the October report did not contravene that view. He said the big increases in orders reported in the summer apparently have leveled off despite the monthly fluctuations.

Orders for defense capital goods jumped 41.1% to $10.42 billion in October after falling 8.1% in September.

Orders for electrical machinery also went up 1.8% in October after declining 2.1% in September.

But orders for primary metals fell 0.6% after increasing 5.9% in September, and orders for non-electrical machines were down 3.6% last month after a 6.1% drop.