U.S. durable goods orders came in better than expected for October, but economists are cautious about the significance of the bounce.

Durable goods orders grew 12.8% in the month, stronger-than-expected. But BMO Nesbitt Burns calls it “one of the wildest batches of economic data ever published”.

Most of the bounce was in transportation, thanks to the joint strike fighter contract that went to Lockheed, sending the defence category up an astonishing 206%. “It makes sense that defence spending will be rising. But there is no way the $18 billion October defense bookings level, compared with a $6 billion trend, can be sustained,” says BMO.

Excluding transportation , the report showed a decent 3.4% rebound from the 6.4% September drop. ” In coming months, we should get a cleaner reading for the trend in new orders. Given the volatility introduced by the September 11th tragedy, it’s simply too soon to put much weight on the bounce seen today,” says BMO.

It notes that a bounce in orders was inevitable in October. But in the months ahead, it says, “Keep your eye on the broader weakening trend for now. We believe that near-term weakness in factory production is already baked into the financial market cake. This report was largely neutral from that perspective. The recovery is expected by spring, and orders will likely pick up in the winter months to confirm that prospect.”