U.S. Durable Goods Orders Unexpectedly Drop 0.7% In November

(RTTNews) - New orders for U.S. manufactured durable goods unexpectedly decreased in the month of November, according to a report released by the Commerce Department on Tuesday.

The report said durable goods orders fell by 0.7 percent in November compared to the 0.3 increase that was reported for October.

The pullback in durable goods orders came as a surprise to economists, who had expected orders to surge up by 3.0 percent.

The unexpected drop in durable goods orders was partly due to a pullback in orders for transportation equipment, which fell by 1.2 percent in November after jumping by 3.3 percent in October.

Orders for defense aircraft and parts tumbled by 7.8 percent in November following the 43.5 percent jump seen in the previous month.

Excluding orders for transportation equipment, durable goods orders still fell by 0.4 percent in November after edging down by 0.1 percent in October. Economists had expected ex-transportation orders to climb by 1.0 percent.

The report showed a steep drop in orders for defense capital goods, which plunged by 8.1 percent in November after surging up by 10.0 percent in October.

The Commerce Department said durable goods orders edged down by just 0.1 percent when excluding orders for defense-related items.

Orders for computers and electronic products and primary metals also showed notable decreases, while orders for machinery increased by 0.9 percent.

Meanwhile, the report said orders for non-defense capital goods excluding aircraft, an indicator of business spending, came in unchanged in November after tumbling by 1.9 percent in October.

Shipments of non-defense capital goods excluding aircraft, which get plugged into GDP, edged up by 0.2 percent in November after falling 0.9 percent in the previous month.

Paul Dales, Senior U.S. Economist at Capital Economics, said the data suggests business investment in equipment will be broadly unchanged in the fourth quarter.