Increased Orders for Durable Goods Shows Consumer Confidence
Nov 12, 2003
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U.S. consumers heartened by signs of an improving job market have grown more confident, which may be directly responsible for a recent rise in orders for durable goods. This confidence is being shown by the upsurge in orders factories received for durable goods such as refrigerators, cars, and washing machines during October.
As hopes for a brighter employment picture took hold, an index of consumer confidence from the New York, U.S. business group The Conference Board climbed to 81.1 in October from a revised 77.0 in September, beating forecasts for a rise to 79.5.
Meanwhile orders for durable goods designed to last 3 years or more rose 0.8 percent, the Commerce Department said.
The figure fell short of analysts’ predictions calling for a 1.4-percent increase, but it was accompanied by large upward revision for the August orders, which registered a 0.1-percent decline instead of the previously reported 1.1-percent drop.
"The figures were pretty darn healthy," says Michael Cloherty, a fixed-income strategist at Credit Suisse First Boston. "It sets you up well for the fourth quarter since it suggests we'll see a rebuilding of inventories."
Overall, durable good orders were weighed down by a 26.7-percent drop in demand for defense capital goods and by a 3.9-percent decline in non-defense aircraft and parts. Excluding defense, demand for durable goods rose 2.6 percent. Orders for non-defense capital goods rose 3.4 percent and those orders excluding aircraft, which many economists look to as a sign of business investment plans, climbed 3.9 percent. (Reuters)
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