updated 10/27/2004 8:43:59 AM ET 2004-10-27T12:43:59

Orders to U.S. factories for big-ticket durable goods, propelled by a jump in demand for communications equipment, edged up 0.2 percent in September.

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The Commerce Department said Wednesday that the increase in orders for durable goods — items expected to last three or more years — followed a decline of 0.6 percent in August. The August drop had earlier been reported as a more modest 0.3 percent decrease.

The seesaw pattern for durable goods orders over the past two months reflects an economy that is struggling to regain momentum in the face of soaring oil prices, falling consumer confidence and lackluster job creation.

The economy’s performance has become a top issue in the presidential campaign with President Bush contending that his tax cuts have laid the stage for stronger growth in the years ahead while Democratic challenger John Kerry argues that Bush’s tax cuts represented a windfall for the wealthy while doing little to boost the overall economy.

The 0.2 percent rise in durable goods orders in September was only the third increase of the past six months. Orders were up 1.9 percent in July and 1.3 percent in June after having posted big declines in May and April.

The $417 million increase in orders in September pushed the total for the month to $195.7 billion on a seasonally adjusted basis.

Excluding the volatile transportation sector, orders were up a stronger 1.7 percent last month following a 2.8 percent increase in August.

The rebound last month was led by a 9.3 percent increase in demand for computers and other electronic products, reflecting a 35.6 percent jump in orders for communications equipment.

The nation’s manufacturing sector has struggled in recent years with job losses since Bush took office of 2.7 million, including a drop of 18,000 jobs in September.

With manufacturing job losses looming as a big issue in a number of battle ground states, Kerry has charged that Bush has not done enough to fight unfair foreign trade practices which Kerry contends have triggered a wave of outsourcing as U.S. firms have shipped production abroad.

Overall, the nation’s unemployment rate held steady in September at 5.4 percent but payrolls grew by a lower-than-expected 96,000, continuing a string of months when payroll growth has fallen short of analysts’ expectations.

The modest rise in durable goods orders followed a report Tuesday showing that consumer confidence fell for a third straight month in October, pushing the Conference Board index to 92.8, its lowest reading in eight months. Analysts blamed the drop in part on the recent surge in energy costs, which has pushed crude oil prices to record highs.

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