Gold At session Lows Following 2.2% Rise In US Durable Goods Orders



Figures released by the U.S. Commerce Department on Wednesday revealed non-defense capital goods orders excluding aircraft - a closely watched proxy for business spending plans- rose 1.3% in September after an upwardly revised 1.3% increase in August.

The numbers: Durable-goods orders rose 2.2% in September, beating the MarketWatch forecast of a 0.7% gain.

USA durable goods orders were expected to rise by 1% in September after 2% in August (before revisions). The latest data show manufacturers in the US headed into the fourth quarter on a strong footing. "Export demand is surging", said Chris Rupkey, chief financial economist at MUFG Union Bank in NY.

Manufacturing has been improving since the middle of 2016, following a two-year slump caused by cutbacks in the energy industry and a strong dollar that made USA goods costlier overseas.

What happened: The rise in orders last month was concentrated in commercial aircraft, military hardware and electronics. Prospects are brighter now with the dollar weakening in value this year, which makes USA exports more competitive on overseas markets, and a rebound in energy drilling.

Core durable goods, which strips out the volatile transportation sector, increased 0.7% last month.

Transportation equipment orders led September's increase, rising 5.1%, the biggest increase since June.

"Overall, business equipment investment appears to be going from strength to strength, providing further reason to believe that the economy will continue to grow at a healthy pace in the fourth quarter as well", said Andrew Hunter, an economist at Capital Economics, in a note to clients. Orders for autos and auto parts edged up a tiny 0.1 percent after a 2.8 percent gain in August.

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