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Orders rise for durable goods

September's unexpected showing is the largest gain since June, reflecting demand for airplanes and autos, a government report says.

October 30, 2008|the associated press

WASHINGTON — Orders to U.S. factories for big-ticket manufactured goods posted an unexpectedly strong showing in September -- the largest gain in three months -- on a surge in demand for airplanes and autos, government data showed Wednesday.

The Commerce Department reported that orders for durable goods rose by 0.8%, surprising economists who had expected a decline. Orders had fallen by 5.5% in August, which was the biggest setback in nearly two years.

The September increase was the largest gain since a 1.4% rise in June, but all the strength came in the transportation sector. Demand for commercial aircraft, an extremely volatile category, shot up by 29.7%, and orders for motor vehicles rose by 3%, the biggest gain in more than a year.

The big increase in orders for motor vehicles probably reflected the use of incentive packages by automakers trying to spur lagging demand during a generally dismal sales year. Orders for motor vehicles and parts had fallen by a sharp 8.8% in August. Demand is expected to remain weak, reflecting the hard economic times, rising unemployment and sagging consumer confidence.

Outside of transportation, orders fell by 1.1%, after an even bigger 4.1% drop in August. The back-to-back declines indicated the pressures facing manufacturing as the U.S. economy appears to be falling into a recession.

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