Business Spending Lifts Orders for Durable Factory Goods

The Commerce Department said on Thursday that orders for durable goods increased 4.2 percent last month. That followed a 5.2 percent gain in May, which was revised higher.

Most of the gain occurred because aircraft orders, which are volatile month to month, jumped 31.4 percent. Boeing said it received orders for 287 planes in June, up from 232 in May. Excluding autos and airplanes, orders were unchanged.

Orders that signal planned business investment, which exclude volatile transportation and military orders, increased in June for the fourth straight month. The 0.7 percent gain last month was buoyed by more machinery demand. And orders in May were much stronger than previously reported.

Even with the gain, business investment is not likely to help economic growth in the April-June quarter, economists said. That is because the government measures shipments, rather than orders, when calculating business investments’ contribution to growth. Shipments fell in June. But the increase in orders this spring suggests shipments will rise in the July-September quarter and add to growth.

Jonathan Basile, an economist at Credit Suisse, said rising orders were a “recipe for a speedup in manufacturing and business investment” in the third quarter.

Durable goods are items meant to last at least three years, like computers, industrial machinery and appliances.

In other economic news on Thursday, government data showed that more people filed new claims for unemployment insurance benefits last week.

Initial jobless claims rose to 343,000 in the week ended July 20, an increase of 7,000 from the previous week’s revised 336,000 claims, the Labor Department reported.

Last week’s increase in claims, an indicator of the pace of layoffs, was larger than the 340,000 reading expected on average by analysts.

Article source: http://www.nytimes.com/2013/07/26/business/economy/business-spending-lifts-orders-for-durable-factory-goods.html?partner=rss&emc=rss