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9/27/12, "Durable goods drop worst since recession," Reuters
"New orders for long-lasting U.S. manufactured goods in
August fell by the most in 3-1/2 years, pointing to a sharp slowdown in
factory activity even as a gauge of planned business spending rebounded.
The Commerce Department said on Thursday durable goods
orders dived 13.2 percent, the largest drop since January 2009, when the
economy was in the throes of a recession. Orders for July were revised
down to show a 3.3 percent increase instead of the previously reported
4.1 percent gain.
Economists polled by Reuters had expected orders for
durable goods -- items from toasters to aircraft that are meant to last
at least three years -- to fall 5 percent.
Last month, the drop in orders reflected weak aircraft
and automobiles demand. Boeing received only one aircraft order in
August, down from 260 in July, according to information posted on the
plane maker's website.
Transportation equipment tumbled 34.9 percent after
racing ahead 13.1 percent in July. Excluding transportation, orders fell
1.6 percent after dropping 1.3 percent the prior month. Economists had
expected this category to rise 0.3 percent after a previously reported
0.6 percent fall.
Non-defense capital goods orders excluding aircraft, a
closely watched proxy for business spending plans, rose 1.1 percent,
halting two straight months of hefty declines. That was above
economists' expectations for 0.5 percent gain.
But shipments of these goods, which are used to calculate equipment
and software spending in the gross domestic product report, fell 0.9
percent after declining 1.1 percent in July. The weakness suggested
third-quarter economic growth would probably not improve much from the
April-June's 1.3 percent annual pace.
Manufacturing, which has been the main driver of the
recovery from the 2007-09 recession, has been hit by turbulence from
sluggish domestic and global demand.
Fears that the U.S. Congress could fail to avert a
"fiscal cliff" -- the $500 billion or so in expiring tax cuts and
government spending reductions set to take hold in 2013 -- have also
left businesses with little incentive to boost production."
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