Durable Goods Orders Plunge in September

MSN Money/CNBC/Reuters ^ | 10/25/02 | Staff

[arete]

WASHINGTON (Reuters) - Orders for U.S. durable goods plunged in September, hurt by weak demand for transport equipment and declines in many other sectors, the government said on Friday in a report likely to raise new doubts about the economic recovery.

Orders for durable goods -- costly manufactured items intended to last three years or more -- tumbled 5.9 percent in September after falling just 0.6 percent in August, the Commerce Department said. The number was far worse than analyst expectations of a 1.8 percent decline and was the largest drop since November last year.

Demand for goods fell across the board. Orders for motor vehicles and parts fell 2.8 percent while non-defense aircraft and parts plummeted 46.3 percent. Orders for goods excluding transportation were down only 1.0 percent.

The report also showed that business investment recovery has yet to get underway. Orders for computer and electronic equipment fell 6.0 percent and demand for communications equipment sank 52.0 percent, the largest drop on record. Machinery orders declined 1.2 percent and non-defense capital goods orders were down 12.6 percent, the largest drop since December 1997.

[arete]

Demand for goods fell across the board. Orders for motor vehicles and parts fell 2.8 percent while non-defense aircraft and parts plummeted 46.3 percent.

Now, where is that recovery that we've been hearing so much about?

Richard W.

[arete]

FYI

Comments and opinions welcome.

Richard W.

[scooby321]

the economy is not that Bad other than the Airlines who have been doomed by mismangement and fewer people flying under 500 miles because of fears & Hassles of going to an Airport. The economy in others sectors are growing

[arete]

The economy in others sectors are growing

Telemarketing is sure growing.

Richard W.

[KeyWest]

Dock slowdown= inventory at the piers and not in the factory to keep up production= no more buying until good show up at the factory. The blame is with the union. Otherwise we would still be in recovery. Seems to me to be the Dems are behind this. Hurt the economy to score points.

[The Duke]

Telemarketing is sure growing.

Yeah, in New Delhi!

[lewislynn]

Dock slowdown= inventory at the piers and not in the factory to keep up production= no more buying until good show up at the factory. The blame is with the union.

By your analysis the blame is on foreign dependence, not the union. If we manufactured more of our own here, the closing of the ports by THE MARITIME ASSOCIATION wouldn't have held up production....which has nothing to do with orders.

If the union workers are as vital to our economy as you indicate, they're worth whatever they can get.

[LS]

What is really driving this is the airline industry. That is where the overwhelming majority of this drop is. In a word, "terrorism." Boeing just announced major layoffs because the airlines are all cutting flights. But I bet if you get inside these numbers, MOST OF THEM, including the "unrelated sectors," are related to aircraft/air transportation losses.

Barring a miracle high-tech computer breakthrough, this is still going to be a down market until we straighten out Iraq and mop up Al-Quaeda.

[LS]

You're living in a dream world. The dockworkers strike is POLITICAL, and if it wasn't them, it would be the teamsters. Your argument would still be invalid. No matter where stuff is made, you have to transport it.

[arete]

this is still going to be a down market until we straighten out Iraq and mop up Al-Quaeda.

In other words, until we grab all Saddam's oil and gold to support our credit inflated instant gratification goodtime lifestyle.

Richard W.

[shrinkermd]

IMHO what we are experiencing is the end of a credit cycle such that all the bad debts will be repudiated. Government probably can do very little and especially when the government's balance sheet is so tattered.

I hope and pray the news does not become worse before the election. Historically, leftist and fascist regimes are ushered in at the end of credit cycles. The average citizen lashes out at those in power like a snake without regard to reason or judgement. Then they replace the government with anyone who promises better but who really is interested in power and the means to maintain it.

[arete]

anyone who promises better but who really is interested in power and the means to maintain it.

You must be kidding. That is what we have now. The country is being run by the ruling class elite regardless of party. The American people were sold out a long time ago.

Richard W.

[X-Servative]

Marketing in general has not come back, especially on the small business side. Unfortunately, many small businesses are missing out on an opportunity to market and expand market share while other contract.

[Soren]

I agree completely. Debt levels are enormous and we have only just begun to feel the impact of a debt implosion. Throw in the fear of terrorism, and the stage is set for a disheartening move on the freedom/security spectrum.

[imawit]

The country is being run by the ruling class elite regardless of party. The American people were sold out a long time ago.

Sooooo right. Didn't know that you agreed with me politically too.

[LS]

It's OUR oil He's just borrowing it. :)

[arete]

That's one way of looking at it -- afterall, where would Saddam be without us?

Richard W.

[LS]

Where would any of them be without us? Seriously, though, almost word for word I just read an analyst on the Yahoo finance DJA page regarding what I just said about Iraq.

[goodnesswins]

FWIW....my husband does contract negot/purchasing, etc. for a large wood products organization.....where various contractors in the past were getting "inquiries for work" they are now saying they are getting "go aheads" for the work....