US durable goods orders up 1.7 per cent in August
Posted Sep 27, 2017 08:33:16 AM.
Last Updated Sep 27, 2017 11:40:20 AM.
This article is more than 5 years old.
WASHINGTON – Orders for long-lasting manufactured goods rose a modest 1.7 per cent in August, reflecting a rebound in the volatile aircraft sector. A gauge of business investment was up for a second month, providing hope that a revival in manufacturing is gaining strength.
Last month’s advance in orders for durable goods followed a 6.8 per cent plunge in July, the Labor Department reported Wednesday. Both months were heavily influenced by swings in orders for commercial aircraft, which surged 44.8 per cent in August after having plunged 71.1 per cent in July.
A closely watched category that serves as a proxy for business investment posted a 0.9 per cent gain in August after a 1.1 per cent increase in July. Economists believe that U.S. factory output should continue rising in coming months, reflecting a rebound in the global economy.
Manufacturing has been improving since the middle of 2016, following a two-year slump caused by cutbacks in the energy industry and a strong dollar that made U.S. goods costlier overseas. Prospects are brighter now with the dollar weakening in value this year, which makes U.S. exports more competitive on overseas markets, and a rebound in energy drilling.
The overall economy, as measured by the gross domestic product, expanded at a solid 3 per cent rate in the April-June quarter after a tepid 1.2 per cent gain in the first three months of the year. Analysts believe activity in the current July-September quarter will likely slow a bit, in part because of the devastation caused by hurricanes Harvey and Irma.
For August, orders excluding transportation were up 0.2 per cent after a stronger 0.8 per cent rise in July.
Demand for machinery rose 0.3 per cent while orders for computers and related products fell 2.3 per cent. Orders for autos and auto parts rose 1.5 per cent after a 2.1 per cent drop in July.
