Washington, Nov 25 2009 November 25 - New orders for durable goods unexpectedly fell by 0.6% in October, marking the second decline in the last three months, the Commerce Department reported today. Economists were expecting a 0.5% rise after orders rose 2.0% in September.

The October decline was due in large part to a 1.0% decline in manufacturing orders, an 8.0% decline in machinery orders, a 2.1% decline in orders for computers and electronic products and a 2.0% decline in orders for capital goods. These declines more than offset increases in orders for metals, electrical equipment, and transportation equipment, which rose 1.5%. This was due entirely to a 50.8% increase in orders for civilian aircraft and parts, a surprise given Boeing's meager 4 net new orders. Orders in other transportation categories -- autos and defense aircraft -- fell slightly in October.

When excluding for transportation, durable goods orders declined a much steeper 1.3%, the largest monthly decline since March.

Adding to an already bleak report is a sharp 2.9% decline in non-defense capital goods excluding aircraft, typically considered a barometer of health for business spending.

October shipments fell 0.2%, unfilled orders fell 0.4%, while inventories were flat in the month.

tessa.moran@thomsonreuters.com /wash

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