Orders for long-lasting manufactured goods rose 2.2 percent in September, the biggest gain in three months, led by a big increase in orders for commercial aircraft. A key category that tracks business investment posted a third straight solid monthly gain.
The September advance in durable goods followed a 2 percent rise in August and was the sharpest increase since a 6.4 percent jump in June, the Commerce Department said Wednesday.
Economists said the 2.2 percent rise in September orders, double what they had been expecting, was a good sign that the long-awaited rebound in manufacturing is on track, helped by an improving global economy.
"There isn't a single area in the world that isn't moving forward at the moment and they need American manufacturers' machinery and equipment to help build their economies. Export demand is surging," said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.
The September strength reflected a big 31.5 percent surge in orders for commercial aircraft, a volatile category that can swing widely from month to month. A key category that serves as a proxy for business investment was up 1.3 percent in September, following identical 1.3 percent gains in August and July.
Manufacturing has been improving since the middle of 2016, following a two-year slump caused by cutbacks in the energy industry and a strong dollar that made U.S. goods costlier overseas. Prospects are brighter now with the dollar weakening in value this year, which makes U.S. exports more competitive on overseas markets, and a rebound in energy drilling.
The overall economy, as measured by the gross domestic product, expanded at a solid 3.1 percent rate in the April-June quarter after a tepid 1.2 percent gain in the first three months of the year. The government will release its first look at the July-September quarter on Friday. Many economists believe GDP growth for the third quarter will be a solid 2.5 percent to 3 percent.
For September, orders excluding transportation were up 0.7 percent, matching the August increase.
Demand for machinery fell 0.2 percent in September, while orders for computers and related products fell 5.5 percent. Orders for autos and auto parts edged up a tiny 0.1 percent after a 2.8 percent gain in August.