NEW YORK (Reuters) - The Commerce Department said on Tuesday new durable goods orders were unchanged in October versus an increase of 9.2 percent in September.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rebounded 1.7 percent last month after falling 0.4 percent the prior month.
Economists had expected so-called core capital goods orders to fall 0.5 percent.
GUS FAUCHER, SENIOR MACROECONOMIST, PNC FINANCIAL SERVICES, PITTSBURGH
”It’s better than what we were expecting, in particular with ex-transportation which were up 1.5 percent. There was some weakness in shipments. Business spending has slowed in part because of worries about the ‘fiscal cliff.’ It will be soft going into early next year until the fiscal cliff is resolved.
This is consistent with the slow gains in business spending. It will be an okay quarter, not a great one.”
GARY THAYER, CHIEF MACRO STRATEGIST, WELLS FARGO ADVISORS, ST. LOUIS, MISSOURI
”The number was a little better than anticipated. Orders were flat in October after a big increase in September. Analysts had expected a drop in orders.
”It looks like the manufacturing sector was not quite as weak in October as economists thought. Inventories, however, rose relative to shipments which suggests growth in orders may still be relatively modest going forward.
“Outside of the transportation sector, we’re seeing decent levels of orders which suggests the economy is still healthy, but not strong.”
HUGH JOHNSON, CHIEF INVESTMENT OFFICER OF HUGH JOHNSON ADVISORS LLC IN ALBANY, NEW YORK
“It’s modestly better than expected although this is a very tough number to forecast, so it’s not likely to be a big market mover. Probably the most significant component is durable goods excluding transportation, which was up 1.5 percent. You could also look at durable goods ex-defense, which was up 0.1 percent. Those are leading indicators for the economy and they are encouraging.”
“On balance, you would have to look at this number and say it is encouraging. It is one piece of a many piece puzzle, but a good piece. For those of us that are worried about the economy in 2013 given the uncertainty of the fiscal cliff, this is a little bit helpful. But that doesn’t removing the overarching worry about the cliff or that tax policy and spending policy will not be right given the weak economy.”
OMER ESINER, CHIEF MARKET ANALYST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON DC:
“Durable goods is a notoriously volatile indicator and so in that respect we always take it with a grain of salt. Having said that, the better-than-expected reading of not only the headline number but key sub components suggests that the economy may be on a better footing than expected heading into the fourth quarter. In terms of data, consumer confidence may be more closely watched later this morning.”
STOCKS: U.S. stock index futures are little changed
BONDS: U.S. bond prices lost a little ground after data
FOREX: The dollar pared gains versus euro, extended gains versus Japanese yen after durable goods data
Americas Economics and Markets Desk; +1-646 223-6300