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In an unexpected turn, factory orders move up

From Reuters

New orders at U.S. factories surprisingly rose 0.2% in September, boosted by gains in orders for machinery, computers and nondurable goods, a Commerce Department report showed Friday.

Analysts had expected orders to fall 0.5%. August orders were revised to show a 3.5% slide instead of the 3.3% drop first reported.

September’s 1.7% drop in durable-goods orders was unchanged after the government’s initial estimate last week.

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Orders for nondurables, which include oil and plastic products, rose 2.1%, suggesting the effect of higher oil prices.

“It is mostly all price-related,” said Kevin Logan, an economist for Dresdner Kleinwort Wasserstein in New York.

“Energy prices have been up quite a lot lately, so the orders reflect a nominal increase in the value rather than a real increase in the volume for the most part,” Logan said.

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Transportation equipment orders, the largest category of factory orders, fell 6.2% in September as orders for motor vehicle bodies and parts slipped 1.1% and defense aircraft orders tumbled 37.2%.

However, civilian aircraft orders expanded 18.1%.

Excluding transportation, factory orders rose 1.4%. When defense orders were stripped out, factory orders rose 1.3%.

Nondefense capital goods orders excluding aircraft, a proxy for business spending, were revised to a 0.6% rise from a gain of 0.4%.

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Orders for metals, machinery, and electronic products all rose in the month.

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