A separate report on Wednesday showed that Americans increased purchases of new homes in August after cutting back in July, suggesting that higher mortgage rates are not yet slowing the housing recovery.
The Commerce Department reported that orders for durable goods, items expected to last at least three years, edged up 0.1 percent in August. Such orders plunged 8.1 percent in July, largely because of a steep drop in volatile commercial aircraft orders.
The August orders were held back by a decline in demand for military aircraft and other military goods. That could be related to steep government spending cuts that took effect in March. Excluding military spending, orders rose 0.5 percent.
Auto factories reported a 2.4 percent increase in orders, the biggest in six months.
And demand for so-called core capital goods rose 1.5 percent, after falling 3.3 percent the previous month. Core capital goods are a good measure of businesses’ confidence in the economy and include items that point to expansion, like machinery.
Still, economists said the gains were not enough to reverse the declines in previous months.
“It was definitely a mixed month,” Jennifer Lee, an economist at BMO Capital Markets, said. “The gains in core orders and shipments in the month do not offset weakness in the last couple of months.”
Durable goods shipments rose 0.9 percent in August, after two months of declines. The shipment figures are used to calculate economic growth.
The pickup in core capital goods orders suggests production and shipments could rise in the final three months of the year.
“Third-quarter growth in equipment investment will be pretty weak, but the fourth quarter should be notably better,” said Paul Ashworth, an economist at Capital Economics.
In its separate report, the Commerce Department said sales of new homes increased 7.9 percent last month to a seasonally adjusted annual rate of 421,000. That comes after sales plunged 14.1 percent in July to a 390,000 annual rate.
The rebound in sales could ease worries that higher mortgage rates have started to damp sales. It coincided with the best month of sales for previously occupied homes in more than six years.
Some buyers may be racing to close deals before rates rise further. The average rate on the 30-year fixed mortgage has risen more than a full percentage point, to about 4.5 percent, since May.
New-homes sales were 12.6 percent higher in August than a year earlier, although the pace remains well below the 700,000 consistent with a healthy market.
The median price of a new home sold in August fell 0.7 percent from July to $254,600.
Sales rose in all but one region of the country in August, increasing 19.6 percent in the Midwest, 15.3 percent in the South and 8.8 percent in the Northeast. Sales plunged 14.6 percent in the West, the second month of declines.
Article source: http://www.nytimes.com/2013/09/26/business/economy/orders-for-durable-goods-rose-slightly-in-august.html?partner=rss&emc=rss