By Eric Morath and Anna Louie Sussman

WASHINGTON--Demand for long-lasting manufactured goods rose in October at the fastest pace in a year, a sign the U.S. factory sector has begun to stabilize.

Orders for durable goods--products designed to last longer than three years, such as trucks, computers and metals-rose 4.8% to a seasonally adjusted $239.4 billion from a month earlier, the Commerce Department said Wednesday. Economists surveyed by The Wall Street Journal expected a 2.7% gain in overall orders.

October's jump was driven by a near doubling in orders for civilian aircraft, a highly volatile segment, but demand for most other categories increased as well. When excluding orders tied to transportation, demand increased 1%. When excluding defense, orders rose 5.2%.

September's overall orders were revised to a 0.4% gain from a previously estimated decline. As a result, orders have increased for four straight months, but are still down slightly through the first ten months of this year, compared to the same period in 2016. Wednesday's report entirely represents activity that occurred prior to the presidential election.

Measures of manufacturing activity had been choppy over the past year as a strong dollar caused U.S.-made goods to be more expensive for overseas customers.

But like recent durables orders, other data points to signs of improvement. The Institute for Supply Management's purchasing manufacturers' index moved more firmly into expansion territory in October, from September. The Federal Reserve's measure of manufacturing output rose for the fourth time in five months in October, but the index remains slightly down from a year earlier.

Wednesday'sreport showed an important proxy for business investment, nondefense capital goods excluding aircraft, rose 0.4% last month, but is down 4% through October, compared to the first ten months of last year.

Inconsistent business spending has been one factor constraining growth in gross domestic product to around 2% annually, a lackluster rate compared to other expansions since World War II.

Orders for machinery, computers and electrical equipment and appliances all increased in October. Orders for motor vehicles and parts declined.

Defense orders fell 3.7% last month. Defense orders fell the last two months after posting strong increases in July and August.

Orders for civilian aircraft and parts increased 94.1% in October from September. Boeing Co., the country's largest aerospace firm, separately reported October orders for jetliners increased to 85 in October from 55 in September. Boeing data is not adjusted for seasonality.

The Commerce Department's durable-goods report can be accessed at: http://www.census.gov/manufacturing/m3.

Write to Eric Morath at eric.morath@wsj.com and Anna Louie Sussman at anna.sussman@wsj.com.

(END) Dow Jones Newswires

November 23, 2016 08:45 ET (13:45 GMT)

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