Durable Orders Up 8.7% in July

In a positive sign for the U.S. economy, orders for durable goods rose 8.7% in July, more than at any time in the last nine months, the Commerce Department reported Tuesday. Orders excluding transportation equipment rose 3.9%.

A rise in orders for durables, which are manufactured goods expected to last at least three years, will eventually increase the amount of goods produced by U.S. factories for shipment by trucks.

Economists had expected July durable goods orders to rise only 1.5%, Bloomberg said. Orders in June declined a revised 4.5%. Strong demand for computers, cars and aircraft fueled the surge, Commerce said.

Orders excluding transportation equipment were expected to rise 1%.

Also Tuesday, the Conference Board said consumer confidence dropped in August to a nine-month low. (Click here for the full story.)

Analysts told Bloomberg the durables report suggests business investment may be on the verge of accelerating. This has been mentioned by the Federal Reserve as a key to a full economic recovery.

Tuesday's report showed orders for transportation equipment increased 20.8% after falling 5.8% in June. Bookings for motor vehicles rose 7.5% and commercial aircraft orders jumped 121.6%.

Excluding defense orders, durable goods orders rose by a record 7.3%.

Commerce also said inventories of durable goods fell 0.4% in July, while shipments rose 3.1%.

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