WASHINGTON: New orders for US-made goods fell less than expected in October and shipments of core capital goods were much stronger than previously reported, pointing to sustained strength in manufacturing that should buoy the economy.

Factory goods orders dipped 0.1 per cent amid a drop in demand for both civilian and defense aircraft, the Commerce Department said on Monday. September data was revised to show orders increasing 1.7 per cent instead of the previously reported 1.4 per cent rise.

Economists polled by Reuters had forecast factory orders falling 0.4 per cent in October.

Orders for non-defense capital goods excluding aircraft -seen as a measure of business spending plans - rose 0.3 per cent in October instead of the 0.5 per cent drop reported last month. These so-called core capital goods orders surged 2.3 per cent in September.

Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, advanced 1.1 per cent in October instead of the previously reported 0.4 per cent rise. Core capital goods shipments increased 1.3 per cent in September.

October’s upward revision to core capital goods shipments could prompt economists to boost their fourth-quarter GDP growth estimates, which are currently as high as a 3.5 per cent annualized rate. The economy grew at a 3.3 per cent pace in the third quarter.

US financial markets were little moved by the data.

Business spending on equipment has increased strongly this year as corporations anticipated hefty tax cuts from the Trump administration. Republicans in the US Congress have approved a broad package of tax cuts, including slashing the corporate income tax rate to 20 per cent from 35 per cent.

Business spending on equipment increased at its fastest pace in three years in the third quarter. That is helping to underpin manufacturing, which makes up about 12 per cent of the US economy. Manufacturing is also being supported by a weakening dollar, which has lost about 7 per cent of its value against the currencies of the United States’ main trading partners this year.

Reuters