Reflecting a substantial rebound in orders for transportation equipment, the Commerce Department released a report on Thursday showing new orders for U.S. manufactured durable goods jumped much more than expected in the month of August.
The Commerce Department said durable goods orders surged up by 4.5 percent in August after falling by a revised 1.2 percent in July.
Economists had expected durable goods orders to climb by 2.0 percent compared to the 1.7 percent slump that had been reported for the previous month.
The bigger than expected rebound in durable goods orders came as orders for transportation equipment jumped by 13.0 percent in August after tumbling by 3.7 percent in July.
Orders for non-defense aircraft and parts led the way higher, soaring by 69.1 in August after plunging by 29.1 percent in July.
Excluding the spike in orders for transportation equipment, durable goods orders inched up by just 0.1 percent in August after rising by 0.2 percent in July. Ex-transportation orders had been expected to increase by 0.5 percent.
Increases in orders for primary metals and electrical equipment, appliances and components were partly offset by a drop in orders for computers and electronic products.
Meanwhile, the report said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, fell by 0.5 percent in August after surging up by 1.5 percent in July. Shipments in the same category ticked up by 0.1 percent.
“Nevertheless, based on the strength over the preceding couple of months, the durables data are still consistent with a healthy 8% annualized gain in third-quarter business investment,” said Paul Ashworth, Chief U.S. Economist at Capital Economics. “But that is a little less than we were previously expecting.”
The Commerce Department also said shipments of durable goods climbed by 0.8 percent in August after edging down by 0.1 percent in July.