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Friday, July 25, 2008

Durable Goods Orders Jump 0.8% in June

Associated Press

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WASHINGTON--Orders to factories for big-ticket manufactured goods such as cars, appliances and machinery rose at the fastest pace in four months in June, a much stronger showing than had been expected.

The Commerce Department reported Friday that orders for durable goods increased 0.8% last month, far better than the 0.4% decline that economists had been expecting.

It was the best showing since a 1.1% rise in February and reflected strength in demand for heavy machinery, primary metals such as steel and even a slight rebound in the beleaguered auto industry.

New orders for motor vehicles and parts rose by 1.8%, the best showing in 11 months.

The increase was only a fraction of the big declines in previous months and was not seen as signaling any kind of sustained rebound from U.S. automakers. They are being battered by soaring energy prices that have caused buyers to turn away from formerly hot sellers such as trucks and sport utility vehicles.

Overall, demand for transportation goods fell by 2.6% as the slight increase in auto demand was offset by a big 25.1% plunge in orders for commercial aircraft. Demand for military aircraft was also down, falling by 8.6%.

Excluding the volatile transportation sector, orders for durable goods, items expected to last at least three years, shot up by 2%, the best showing since last December and much better than the 0.2% decline that had been expected.