WASHINGTON, Nov 25 (Reuters) - New orders for key U.S.-made capital goods increased more than expected in October, but momentum is slowing in line with expectations for slower economic growth in the fourth quarter.
Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.7% last month. These so-called core capital goods orders surged 1.9% in September.
Economists polled by Reuters had forecast core capital goods orders increasing 0.5%. Core capital goods orders rose 0.2% year-on-year in October.
Orders last month were supported by demand for electrical equipment, appliances and components, computers and electronic products, primary metals and fabricated metal products. But orders for machinery fell.
Shipments of core capital goods jumped 2.3% last month. Core capital goods shipments are used to calculate equipment spending in the government's gross domestic product measurement. They rose 0.7% in September.
Business investment on equipment rebounded strongly in the third quarter after five straight quarterly declines. Economists expect slower economic growth after a historic pace of expansion in the third quarter.
The economy grew at a 33.1% rate in the July-September quarter after contracting at a 31.4% pace in the second quarter, the deepest since the government started keeping records in 1947. Growth estimates for the fourth quarter are below a 5% rate.
Orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, increased 1.3% in October after racing up 2.1% in September.
Durable goods orders were lifted by a 1.2% increase in orders for transportation equipment, which followed a 3.3% jump in September. Orders for motor vehicles and parts fell 3.2%. Orders for civilian aircraft increased 38.8%. There had been no civilian aircraft orders for three straight months. (Reporting by Lucia Mutikani Editing by Chizu Nomiyama)