Durable Goods Orders Slip in August

New orders for long-lasting U.S. manufactured goods slipped in August on weak demand for motor vehicles, government data showed on Wednesday, but a rebound in a gauge of business spending supported views the economy could avoid another recession.

The Commerce Department said durable goods orders dipped 0.1 percent after an unrevised 4.1 percent jump in July.

Economists polled by Reuters had forecast durable goods orders unchanged last month. Orders were held back by an 8.5 percent drop in bookings for motor vehicles - the largest decline since February last year.

The drop in orders came despite a 23.5 percent rise in orders for civilian aircraft last month. Boeing received 127 orders for aircraft, according to the plane maker's website, up from 115 in July. Delta Airlines placed an order for 100 aircraft.

Excluding transportation, orders also slipped 0.1 percent after rising 0.7 percent in July. Economists had expected this category would also be unchanged.

But non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, increased 1.1 percent last month after a revised 0.2 percent fall in July.

This suggested that businesses, sitting on about $2 trillion in cash, had not responded to the recent financial market volatility by curtailing spending on capital goods. Economists had expected a 0.3 percent rise after a previously reported 0.9 percent decline in July.

Manufacturing, which has done the heavy lifting for the fragile economy recovery, has slowed in recent months, but August's durable goods report pointed to underlying resilience and offered hope that a another downturn might be avoided.

Outside of transportation and primary metals, which fell 0.8 percent, details of the durable goods report were relatively strong. Orders for machinery edged up 0.1 percent, while computers and electronic products rose 1.3 percent. Demand for capital goods increased 4.2 percent and electrical equipment and appliances rose 1.3 percent.

Shipments of non-defense capital goods orders excluding aircraft, which go into the calculation of gross domestic product, increased 2.8 percent after rising 0.4 percent in July.