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Durable Goods Report Confirms Slower Economic Growth

Durable goods orders


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) had a suprisingly steep drop in October, the Commerce Department reported this morning. It was their biggest fall in three months.

A steep drop in aircraft orders was largely responsible for the poor overall showing. Still, the data provide additional evidence that the pace of economic growth is slowing.

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"It is important to note that this report is a volatile one and is known for its wide month-to-month swings, however, the data overall suggest a degree of slowdown of momentum within the factory sector,"

Barclays Capital

economist Henry Willmore wrote in a research note.

Orders for durable goods -- goods intended to last three or more years, such as cars and appliances -- fell 5.5% to $209.9 billion in October, their largest drop since a 13.2% drop in July. Economists polled by


had forecast a drop of 1.3%, on average.

The total was skewed by a 15.8% drop in orders for aircraft and other transportation equipment, to $44.9 billion. Excluding this notoriously volatile component, durable goods orders fell only 2.2%.

Still, the year-on-year growth rate of durable goods orders in October, 1.4%, was the slowest since November 1998.