Business Blog Posts

Orders excluding transportation rose 2.0 percent after falling by 2.8 percent in July, the Commerce Department said on Friday. That was the largest increase since March and beat market expectations for a 1.0 percent gain.

However, overall orders dropped 1.3 percent, the largest decline in a year, after a 0.7 percent increase in July. Markets had expected orders to fall 1.0 percent.

"Overall, I think it's a much stronger number than the headline suggests. It was a weak report last month but I think this definitely shows underlying improvement," said Tom Simons, money market economist at Jefferies & Co. in New York.

U.S. stock index futures extend gains on the data, while Treasury debt prices extended losses. The U.S. dollar fell against the euro.

Data for August such as private sector employment, retail sales and home sales have suggested an easing of the harsh conditions that gripped the economy in the second quarter, calming fears the economy could slide back into recession.

But domestic demand remains lackluster and the Federal Reserve this week said it was prepared to pump more money into the economy if needed to stimulate the recovery and avert a damaging downward spiral in prices.

Last month, non-defense capital goods orders excluding aircraft -- a closely watched proxy for business spending -- rebounded 4.1 percent in August after a 5.3 percent drop in July. Markets had expected a 2.0 percent rise.

Durable goods orders are a leading indicator of manufacturing, a sector which is leading the economy's recovery from the longest and deepest recession since the Great Depression as businesses replenish inventories.

But manufacturing is slowing as domestic demand remains tepid, with households grappling with high unemployment and falling wealth.

The decline in overall orders last month reflected a 40.2 percent plunge in non-defense aircraft orders after a 69.1 percent surge in July.

Boeing Co (BA.N) received only 10 orders for civilian aircraft in August, a sharp slowdown from 130 bookings in July, according to information posted on the plane maker's website.

Orders were also weighed down by bookings for defense aircraft, which fell 2.7 percent, and a 4.4 percent drop in motor vehicle orders.

Durable goods inventories rose 0.4 percent after increasing 0.6 percent in July. Shipments, which go into the calculation of gross domestic product, declined 1.5 percent last month, while unfilled orders dropped for a second straight month.

(Reporting by Lucia Mutikani; Additional reporting by Emily Flitter in New York; Editing by Andrea Ricci)