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Durable goods orders in US fell in September
Durable goods orders fell in September, but orders for core capital goods rose strongly
By The Associated Press

WASHINGTON (AP) ' Companies ordered more heavy machinery, computers and other long-lasting manufactured goods in September, a positive sign for the sluggish economy.

The Commerce Department says overall demand for durable goods fell 0.8 percent. But that was largely because of a 25.5 percent drop in volatile commercial aircraft orders.

Outside of transportation, orders rose 1.7 percent. And orders for core capital goods, which are a measure of business investment plans, rose 2.4 percent. That's the second straight monthly increase and the biggest gain in six months.



Durable goods are products that are expected to last at least three years.

Core capital goods are neither used for defense nor transportation. Economists closely watch those orders because an increase suggests businesses are sticking with their investment plans, despite slow growth and weak consumer spending.

Strong demand for core capital goods is a key reason economists expect annual growth of 2.4 percent in the July-September quarter. That would be a major improvement from the first six months of the year, when the economy expanded at just 0.9 percent, the worst growth since the recession ended more than two years ago.

The government issues its first estimate for third-quarter growth on Thursday.

Growth of 2.4 percent would ease fears that the economy is in danger of slipping back into a recession. Still, it would need to be nearly double that rate to make a significant dent in the unemployment rate, which remained stuck at 9.1 percent in September for a third straight month.

Manufacturing has helped drive growth since the recession ended. Factory production slowed in the spring ' particularly at U.S. auto plants ' after the Japan earthquake disrupted supply chains.

Recent data suggest those supply chains have started to flow more freely.


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