Manufactured Goods Orders Rise 0.4% in Sept.

WASHINGTON — New orders of manufactured goods rose in September for a fourth consecutive month, the Commerce Department said Wednesday, reinforcing other signs of strength in the factory sector.

The value of total new orders increased 0.4% to a seasonally adjusted $336.48 billion in September, after making a jump of 1.2% the previous month, according to revised figures. The department had previously reported that August orders rose 1.3%.

“In the manufacturing sector, the underlying trend remains extremely good,” said Diane Swonk, economist at First Chicago/NBD Bank.

News of the increase fed optimism that U.S. manufacturing will not be hurt too much by decreased export sales to once-fast-growing markets in Southeast Asia.

“Despite the fact that . . . we’re seeing some disruptions in international markets, manufacturing just has an awful lot of momentum,” said economist Priscilla Trumbull of the WEFA Group in Eddystone, Pa.

“It’s going to take three to six months before there’s a significant slowdown,” she said, “and even then we’re talking about slower growth. We don’t expect manufacturing to turn down.”

Some economists said the September report is consistent with the picture painted by the latest report from the National Assn. of Purchasing Management.

The trade group reported Monday that its October manufacturing index rose to 56.0 from 54.2.

But many others, who had expected a 0.2% drop in new orders, were surprised by the Commerce Department report.

Areas of strength, according to the report, include heavy equipment and nondurable items such as food and paper products.

Swonk said that strong profits have been allowing companies to invest in machinery and that retailers were stocking up on nondurable goods in hopes of a busy Christmas season.

Orders for industrial machinery and equipment jumped 1.7% in September, after falling 1.1% in August.

Orders for nondurable goods rose 0.8% after seeing a 0.4% drop the month before.

Orders for costly durable goods such as cars and home appliances edged up 0.1%, after a 2.5% surge in August.

Helping to restrain the rise in total manufacturing orders were declines in orders for electronic and electrical equipment and for transportation equipment.

Those categories had risen strongly in August.

“If you strip out the highly volatile series such as transportation, the report was stronger than the headline number would suggest,” said Robert Dederick, consulting economist at Northern Trust in Chicago. “It also came on top of an extremely strong month before.”

Of course, the central bank is always watching for signs that the U.S. economy may be overheating, and some economists say a rate rise could be in the cards for sometime next year if the economy shows little sign of slowing down.

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Factory Orders

New orders, in billions of dollars, seasonally adjusted:

Sept.: $336.5

Source: Commerce Department