The numbers: Orders for durable goods such as autos and metal parts rose 1.9% in September for the fifth month in row and business investment strengthened again, signaling a steady expansion among American manufacturers that have led the way in the U.S. economic recovery.
The increase in orders last month topped Wall Street expectations. Economists surveyed by MarketWatch had forecast a 0.2% decline.
New orders minus transportation rose a somewhat smaller 0.8%, the government said Tuesday. Regular ups and downs in transportation often exaggerate monthly changes in the level of demand.
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What happened: Orders for new cars and trucks increased 1.5% last month, snapping back from sharp decline in August.
Auto sales have been surprisingly strong since the onset of the pandemic, reflecting the lure of record low interest rates, more people moving out of the cities and a decline in the use of public transportation.
Yet airline manufacturers have suffered a deep decline in new orders and the cancellation of existing ones in light of the collapse in air travel. Boeing BA, -3.90% has been a big drag on the overall level of bookings. Orders for passenger planes were negative again.
Read:Aircraft orders slump to record low as COVID pandemic and quarantines hit travel
Outside of transportation, orders were also mixed.
Bookings rose for primary metals and fabricated-metal parts used in many goods. That’s usually a sign of rising industrial demand.
Bookings fell slightly for machinery, however. They also declined for computers and electrical equipment including appliances.
A key measure of business investment, known as core orders, increased 1% last month and exceeded pre-crisis levels for the second month in a row. These orders exclude defense and transportation.
The increase in investment is a welcome sign that suggests businesses believe the economy will improve next year, but companies are still being very cautious. The latest coronavirus outbreak in the U.S. and around the world is only likely to add to their caution.
See:MarketWatch coronavirus recovery tracker
The big picture: Manufacturers have played a major role in the recovery, but they are unlikely to go unscathed by the latest coronavirus outbreak if it hurts the broader U.S. or global economies.
The recent improvement in business investment, for its part, is more of a bet on next year instead of this one. There could be some rockier times in between now and then.
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Market reaction: The Dow Jones Industrial Average DJIA, -2.29% and S&P 500 SPX, -1.85% were set to open higher in Tuesday trades.
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