-0.1% Recorded for US Durable Goods Orders

New orders for U.S. manufactured capital goods unexpectedly fell in September amid weak demand for computers and electronic products, which could temper expectations for an acceleration in business spending in the fourth quarter.

Total new orders for manufactured goods equaling $227.3 billion, a decline of 0.1 percent, after increases of 0.3 percent in August and 3.6 percent in July.

However, durable orders excluding transportation, an important but volatile component, rose 0.2 percent.

Transportation equipment was the main driver behind the overall decline, with a 0.8 percent drop to $77.5 billion. Motor vehicles rose 1.2 percent, and non-defense aircraft and parts jumped 12.5 percent. But orders for defense aircraft and parts plunged 44.8 percent, after two months of double-digit increases.

Excluding defense, overall orders would have appreciated by 0.7 percent, the data show.

Economists polled by Reuters had forecast core capital goods orders rising 0.3 percent last month after a previously reported 0.9 percent increase in August.

Despite last month's increase in shipments, business spending on equipment likely remained weak in the third quarter.

A lack of business investment has been a major factor behind the economy’s uninspired growth rate in recent years. Some of the weakness is tied to low commodity prices, which have curbed demand for drilling and mining equipment, and a strong dollar that has made capital goods more expensive for overseas firms.

Brittany Baumann, macro strategist at TD Securities, said the report confirmed a weak quarter for business equipment spending, although she noted some recovery is emerging in orders for core capital goods.

Other reports show the U.S. industrial sector stabilizing in September. Manufacturing output rose 0.2% in September, the Federal Reserve said earlier this month, and increased at an annual rate of 0.9% in the third quarter. The Institute for Supply Management, a trade group, said early this month that factory activity expanded in September as new orders rose sharply, following a contraction in August.

Ian Shepherdson of Pantheon Macroeconomics said the data were a bit better than expected due to revisions in prior months, excluding transportation.