Orders to U.S. factories for "big-ticket" durable goods rebounded 2.9 percent in July, nearly recovering their June loss, the government reports.
The Commerce Department said orders for durable goods, expected to last more than three years, totaled a seasonally adjusted $128.3 billion after slumping 3.2 percent in June.`The increase in July orders was mostly for transportation equipment, which increased $1.7 billion or 5.0 percent to $34.9 billion," the report said. `The large increase in aircraft and parts was partially offset by a decline in motor vehicles and parts."
Transportation orders fell 6.3 percent in June.
But excluding transportation, July orders still would have risen 2.2 percent.
"Most of the other major industries had smaller increases," the report said.
Many analysts had been expecting a slight increase in July. Orders in the first half of the year rose in three months and fell in the other three, including a record 10.5 percent drop in January.
Durable goods orders are considered a key signpost for the future since a drop in orders normally triggers a cutback in production plans and job layoffs.
The Labor Department reported earlier that factory unemployment slowed in July, falling by 7,000 jobs compared to 31,000 jobs in June. But that still meant that since reaching a post-recession peak in March 1989, nearly 350,000 factory jobs had been lost.
The average manufacturing work week also was down slightly in July, from 41 hours to 40.9 hours. Manufacturing overtime averaged 3.7 hours, down from 3.8 hours in June.
For the first six months of 1990, orders totaled $744.7 billion, a 1.5 percent decline from the same period of 1989 and an indication of how sluggish demand had been during the first half of the year.
Orders in the key category of non-defense capital goods, often a barometer of business plans to exand and modernize, jumped 10.7 percent to $40.1 billion after edging up 0.7 percent the previous month. Excluding aircraft, the increase was 2.6 percent.
The often-volatile defense category fell 3.1 percent to $7.6 billion on top of a 21.9 percent decline in June.
Non-electrical machinery orders led the major categories, up 2.7 percent to $22.4 billion and regaining the 2.3 percent decline the previous month.
Electrical machinery orders rose 1.9 percent to $20.4 billion after a 3.7 percent decline in June.
Orders for primary metals were up 1.5 percent to $11.6 billion. They had fallen 3.6 percent a month earlier.