Analysis:
- New orders for manufactured durable goods rose $1.5 billion (0.6 percent) in October.
- Manufactured durable goods includes big-ticket items, such as household appliances.
- There has now been increased durable goods orders in four of the last five months.
- Increased durable goods orders is a positive signal for manufacturing.
Economist Corner:
Manufacturer orders of new durable goods to tend to indicate whether the manufacturing sector will expand in the near-future. It would, after all, not make sense for a manufacturer to order new durable goods if they anticipated a slowdown in business on the horizon.
The increase in new durable goods orders in four of the past five months, then, indicates robustness within the U.S. manufacturing sector. This is good news for both manufacturing firms themselves and the workers that they employ. Among those typically employed in the sector, manufacturing employment tends to pay relatively high wages. As a result, the steadiness in the durable goods data is consistent with the increase in overall earnings and wages that is also visible in the data.