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Published: Monday, 10/4/2010

Reports point to steady but modest pace for economy

ASSOCIATED PRESS
A shopper inspects washing machines in California. Orders for durable goods such as appliances fell 1.5 percent in August. A shopper inspects washing machines in California. Orders for durable goods such as appliances fell 1.5 percent in August.
PAUL SAKUMA / AP Enlarge

WASHINGTON - Orders to U.S. factories fell in August, reflecting a big drop in demand for commercial aircraft. But outside of the volatile transportation sector, orders rose for the first time since March.

Factory orders fell 0.5 percent in August, the third drop in the past four months, the Commerce Department said Monday. Orders had been up 0.4 percent the previous month.

Meanwhile, the National Association of Realtors reported that the number of people who signed contracts to buy homes rose 4.3 percent in August, the second consecutive monthly increase, but remained far below last year's pace.

The association said its index of sales agreements for previously occupied homes rose to a reading of 82.3 in August. But that's more than 20 percent below the pace in the same month a year ago.

Taken together, the two reports were viewed as further evidence that the economy is continuing to plod along at a modest pace.

The weakness in manufacturing in August came from a big decline in demand for commercial aircraft and a drop in demand for motor vehicles.

However, outside transportation, orders posted a 0.9 percent increase, reflecting big gains in demand for heavy machinery such as oil-field drilling equipment and turbines and power generators. Demand was also up for computers and various types of electronic equipment.

Orders for durable goods, items expected to last at least three years, fell 1.5 percent in August while demand for nondurable goods, products such as food, clothing, chemicals, and paper, rose 0.3 percent after a 0.1 percent drop in July.



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