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Orders for big-ticket manufactured goods up

Orders for big-ticket manufactured goods advanced in June by the largest amount in three months, reflecting a rebound in demand for airplanes.
/ Source: The Associated Press

Orders for big-ticket manufactured goods advanced in June by the largest amount in three months, reflecting a rebound in demand for airplanes.

The Commerce Department reported that orders for durable goods increased 1.4 percent last month, the best showing since a 5.1 percent increase in March. Orders had declined by 2.3 percent in May.

The June strength was concentrated in orders for commercial airplanes, which soared by 28.7 percent, reflecting strong demand for Boeing Co. aircraft. Aircraft orders, which are extremely volatile from month to month, had fallen by 21 percent in May.

In other economic news, the Labor Department reported that the number of newly laid off workers filing claims for unemployment benefits fell to 301,000 last week, a drop of 2,000 from the previous week. The performance was better than the slight rise that economists had been expecting.

Economists believe that the economy regained momentum in the spring after a lackluster start to the year in which economic growth slowed to a dismal annual rate of 0.7 percent from January through March, the weakest showing in more than four years.

The government will report on April-June growth on Friday, with many analysts believing the report will show a solid rebound to growth of around 3.2 percent despite continued troubles in the housing industry.

The report on orders for durable goods, items expected to last at least three years, showed that the strength was concentrated in aircraft with many other sectors showing declines last month.

Overall transportation orders were up 6.1 percent, but that reflected the 28.7 percent jump in demand for commercial airliners and a 9.9 percent rise in orders for military aircraft. Orders for autos were down 1.4 percent last month.

Outside of transportation, orders fell by 0.5 percent, reflecting weakness in a number of other categories. That was the second straight drop in orders excluding transportation.

Orders for non-defense capital goods excluding aircraft, a category that is considered a good proxy for business investment, fell by 0.7 percent last week following an even bigger 1.5 percent decline in May.

Other sectors showing weakness were primary metals, including steel, which dropped by 3.6 percent and computers and electronic products, down 4.6 percent.