Durable goods orders up
10/29/2009WASHINGTON - Orders to U.S. factories for big-ticket manufactured goods rose in September as the biggest jump in demand for machinery in 18 months offset weakness in commercial aircraft and autos.
Meanwhile, in another economic report yesterday, sales of new homes dropped unexpectedly last month as the effects of a temporary tax credit for first-time owners started to wane. It was the first decline since March.
The Commerce Department said that orders for durable goods expected to last at least three years increased 1 percent last month, matching economists' expectations. It was the second advance in three months, a hopeful sign for the manufacturing sector. But many economists worry that demand could falter in the months ahead as various government stimulus programs wind down.
There was a 7.9 percent rise in orders for machinery, the best showing since an 8.5 percent surge in March, 2008, led the overall increase.
Orders for nondefense capital goods, considered a good proxy for businesses' investment plans for new equipment, rose 2 percent, the strongest advance since June.
Sales of new homes, the Commerce Department said, fell 3.6 percent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists surveyed by Thomson Reuters had expected a pace of 440,000.
Sales in September were off 7.8 percent from a year ago. Despite the surprising decline, the market is up 22 percent from the bottom in January, though down more than 70 percent from the peak in July, 2005.