WASHINGTON — U.S. October durable goods orders were reported down 2.0%, about as expected.

October's orders dip came after two months of gains, and was far less impressive after accounting for special factors.

Orders posted -0.1% ex-transportation, and -1.3% ex-defense. Much of the month's drop was in civilian aircraft orders at -15.9%. But orders ex transportation marked a third month lower out of the last four months.

Boeing Corp. had a 60% orders drop, reporting 79 orders after 127 in September. November aircraft orders will rebound due to massive airshow orders but other areas are flattening.

Machinery was -0.3% and communications equipment -1.2%, showing pockets of orders weakness. Primary metals posted +0.5% and electronics +2.8% ahead of the holiday selling season.

Shipments were +0.2% in October, and inventories +0.3%.

Nondefense capital goods shipments were flat, suggesting slow capital spending at the start of Q4 at about a +1% SAAR. Defense new orders for capital goods were -16.3% and this might reflect the government shutdown.

The last time orders posted a larger decline was -8.1% in July. This raises the question of whether beginning-of-quarter weakness simply is a measurement artifact. Unadjusted orders remain +4.8% over the year.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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