WASHINGTON – The Commerce Department releases its September report on orders for long-lasting manufactured goods. The report will be released Tuesday at 8:30 a.m. Eastern.
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ORDERS UP: The expectation is that durable goods orders rose 0.7 percent last month, according to a survey of economists by data firm FactSet.
BIG DROP: In August, orders slumped as demand for commercial aircraft — a volatile category — descended after a big surge in the previous month.
Many economists are looking for demand in a key category that tracks business investment plans to post a healthy increase in September.
Manufacturing has been a key source of strength for the economy this year and analysts believe that trend is likely to continue.
Economists expect businesses to boost spending as they expand and modernize their operations. Business investment was a key source of strength in the April-June quarter and analysts are looking for a solid gain in the July-September period.
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On Thursday the government will release its first estimate for overall economic growth for the third quarter as measured by the gross domestic product. Analysts project that the economy grew at a 3 percent annual rate and many believe growth will continue at that healthy clip in the final three months of this year, providing steady gains in the second half of 2014.
The first half of the year was much more of a roller coaster, with the economy shrinking at an annual rate of 2.1 percent in the first quarter, reflecting the impact of a harsh winter and other adverse factors, and then bouncing back to growth of 4.6 percent in April-June period.
The Institute for Supply Management reported that its closely watched barometer of manufacturing performance fell to 56.6 in September from 59 in August.
Analysts said that the slowdown was consistent with a recent drop-off in global demand due to economic weakness in Europe and China and the rising value of the dollar, which makes American goods more expensive overseas.
But economists believe that American companies will still see enough in export gains in coming months which, when combined with strong domestic demand, will keep U.S. factories humming.