OUR THOUGHTS ON:

Airline Demand Helps U.S. Factory Orders Meet Estimates

Manufacturing

By Todd Lucas

Thanks to the volatile nature of airline orders, which increased 57.7%, U.S. factory orders rose by 1.7% from August to September. Overall results were in line with economist’s forecasts, which projected an increase of 1.1%.

Although U.S. factory orders increased, after declining the previous two months, it does not signal that all is well with the economy. Economists pay closer attention to core capital goods, which include machinery and electronics, which often are a better indicator of companies' plans to invest. This metric excludes orders for aircraft and defense equipment. Core capital goods decreased 1.3% from August. The decrease was the second such decrease in the previous three months. In fact, demand for machinery dropped 23.6%, and there were also significant declines in construction machinery, electric turbines and generators.

These results suggest that businesses may have been worried about the potential for a looming government shutdown and weakness of the economy as a whole.

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