Orders to U.S. factories for longer-lasting manufactured goods jumped higher in October, rebounding after a September dip.
Orders for durable goods, manufactured products expected to last at least three years, rose 0.6 percent in October after declining 1.4 percent in September. Durable goods orders have been up in four of the last five months.
The increase was unexpected. After the slump in September, durable goods orders were expected to continue their decline in October. Economists had forecast a decline of around 1 percent with a broad range of down 1.8 percent to up 0.7 percent.
Business investment has been weaker than expected recently. A closely watched category that is considered a proxy business investment rose 1.2 percent last month, beating forecasts, after dropping in September. This category excludes orders for aircraft and defense spending.
Including aircraft but excluding defense spending, new orders rose an impressive 3.2 percent.
The better than expected October figures are all the more impressive because they include cars and auto parts, which were depressed by the strike at General Motors, which did not end until late in the month. Orders for cars and auto parts fell 1.9 percent in October after dropping 2.9 percent in September.
Orders for fabricated metal products, up two of the last three months, rose 1.8 percent.
American manufacturing has been a weak spot in the economy, depressed by low levels of business investment and weak global demand. Uncertainty over trade policy and stop-and-go rate cuts from the Fed was likely behind the sluggishness in business investment. But with trade negotiations continuing and the Fed promising rate stability, those concerns are fading in the final months of 2019.