By
updated 8/25/2010 9:18:13 AM ET 2010-08-25T13:18:13

Orders to U.S. factories for big-ticket manufactured goods increased slightly in July, but businesses spent less as the economic recovery lost momentum.

Major Market Indices

Demand for durable goods rose 0.3 percent last month, the Commerce Department said Wednesday. The overall increase was driven by a 75.9 percent increase in orders for commercial airplanes.

Without the volatile transportation sector, orders dropped 3.8 percent — the steepest decline since January. Businesses spent less on equipment and machines. Orders for capital goods fell 8.0 percent.

Machinery and computers were especially hard-hit. Orders for machinery dropped 15 percent, the biggest decline on record for that category.

The report was grim compared to June's results. Overall orders in June declined by a revised 1.0 percent. But excluding transportation, orders rose 0.2 percent. Spending by businesses increased 3.6 percent that month — a rare bright spot.

Factory orders are a key measure of the economic recovery. Manufacturers have helped to lead the rebound. They filled orders for businesses that were building up stocks after whittling them down during the recession.

But many companies are done restocking, cooling demand for factory goods.

With unemployment still near double digits, consumers have not taken up the slack.

Durable goods are expected to last three years or more. The full survey of factory orders will be released next week.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Digesting Durable Goods

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.38%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.40%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 10.87%
10.87%
Cash Back Cards 16.36%
16.33%
Rewards Cards 15.93%
15.92%
Source: Bankrate.com