WASHINGTON (Reuters) - New orders for U.S.-manufactured goods increased more than expected in October amid strong gains in demand for machinery and a range of other goods, which could allay concerns of a sharp slowdown in manufacturing.
The Commerce Department said on Monday that factory orders jumped 1.0% after rising 0.3% in September. Economists polled by Reuters had forecast orders advancing 0.7%. Orders shot up 12.8% on a year-on-year basis in October.
The Federal Reserve's fastest rate-hiking cycle since the 1980s as it battles inflation is dampening demand for goods, undercutting manufacturing, which is also being squeezed by the rotation of spending back to services.
An Institute for Supply Management survey last week showed its measure of the nation's factory activity contracted in November for the first time in 2-1/2 years.
Manufacturing accounts for 11.3% of the U.S. economy. October's jump in factory orders was driven by a 2.2% rise in bookings for transportation equipment, which followed a 2.3% increase in September. Transportation equipment orders were boosted by increases in orders for both defense and civilian aircraft. Motor vehicle orders rebounded 1.7%.
Orders for machinery rose 1.5%. There were also solid gains in orders for computers and electronic products as well as electrical equipment, appliances and components.
The Commerce Department also reported that orders for non-defense capital goods, excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 0.6% in October, instead of 0.7% as reported last month.
Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the gross domestic product report, rose 1.5%. They were previously reported to have jumped 1.3% in October.