WASHINGTON – Orders for long-lasting U.S.-made goods unexpectedly slipped 0.4 percent last month as demand for computers, cars and civilian aircraft slumped, a government report showed on Wednesday.
The Commerce Department (search) said orders for durable goods (search) — big-ticket items like cars and refrigerators meant to last at least three years — would have been much weaker in October were it not for strong military demand.
Non-defense durable goods orders dropped 1.5 percent, the sixth decline in the last seven months, and orders excluding transportation fell 0.7 percent, the department said.
Economists polled by Reuters had expected durable goods orders to rise by 0.5 percent, with non-transportation orders up 0.2 percent and orders excluding defense up 0.3 percent.
While the report was weaker than expected, upward revisions to September's figure helped temper the picture. Durable goods orders in September were up 0.9 percent, compared to the 0.2 percent gain reported previously.
Strong demand for military aircraft gave the October figures a stronger appearance then they would have had otherwise.
Orders for military aircraft soared 35.2 percent last month, but civilian aircraft orders slid 0.4 percent. Motor vehicle demand fell a sharp 2.8 percent and orders for computers and related products dropped 10.3 percent.
Before the report, analysts said a weakening dollar, which makes U.S.-made goods less expensive overseas, would likely be a factor supporting orders growth.
In addition, economists say a federal depreciation bonus expiring at the end of the year that gives companies a tax break for new equipment spending should be offering near-term support to capital outlays.
However, the October report, which offers a key reading on the health of the manufacturing sector, suggested some weakness in business capital spending plans. Civilian capital goods orders, excluding aircraft, fell 3.6 percent last month, reversing much of September's 5.2 percent rise.