Orders for durable goods take off
Demand for aircraft helps propel July surge
Economists, however, remain worried that spreading economic weakness overseas and a rebound in the value of the dollar could spell an end to the export boom later this year.
The Commerce Department said Wednesday that orders for durable goods rose 1.3 percent last month, far above the slight 0.1 percent increase Wall Street had been expecting.
The July increase matched a 1.3 percent rise in June, which was revised up from an earlier reading of 0.8 percent. The matching gains were the strongest since orders for durable goods, items expected to last at least three years, jumped by 4.1 percent in December.
Wall Street investors were encouraged by the better-than-expected gain in durable goods orders. The Dow Jones industrial average rose 89.64 points to close at 11,502.51.
A huge rebound in orders for commercial aircraft, which had fallen sharply in June, led last month's strength. But even outside the volatile aircraft category, there was widespread growth, indicating that American companies are continuing to benefit from a boom in exports, due mainly to the decline in the value of the dollar earlier this year.
"These upbeat capital goods numbers amid a downtrodden U.S. consumer sector indicate how helpful a weak dollar is in the current cycle," said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI, an industry trade group.
But some economists expressed concerns over how much longer the export boom can last, given spreading economic weakness in Europe, Japan and other major overseas markets. They noted that the dollar, which had been on a long slide, has come off its recent lows, which could translate into less of a price advantage for U.S. exporters.
"The recent downturn in growth abroad and stabilization of the dollar could put pressure on capital-goods spending in the months ahead," said Zach Pandl, an economist at Lehman Brothers.
Other analysts were impressed with the staying-power demonstrated in the new orders figures for June and July, and some said it showed the boost manufacturers are getting from increased demand by businesses hiking their investment spending to take advantage of $51 billion in business tax breaks included in the $168 billion economic-stimulus package passed by Congress in February.
The government will release its revised estimate for economic growth in the April-June quarter on Thursday, and economists said they were revising upward their estimates for both second quarter and third quarter gross domestic product growth, based on the better-than-expected orders numbers. GDP measures the value of all goods and services produced within the U.S. and is the broadest barometer of the country's economic health.
David Wyss, chief economist at Standard & Poor's in New York, said he believed the current estimate of 1.9 percent GDP growth for the second quarter will be boosted to between 2.5 percent and 3 percent, while growth in the current quarter will be around 1.7 percent.
"Exports are holding up a lot better than we thought they would with the weakness in Europe and Japan, and we are seeing the impact of the stimulus package on business investment decisions," he said.
Comments
- Canal breaks, causes landslide in Logan 1:07 p.m.
- Reptile Lou won't eat 1:06 p.m.
- Three injured in South Ogden shooting 1:05 p.m.
- Upsets at Saturday's State Am 12:27 p.m.
- Luxury home market stalls 12:02 p.m.
- Kirk Douglas classic on DVD 11:38 a.m.
- Zion fire moving southeast 11:36 a.m.
- More school-money than expected 11:24 a.m.
- Virginia 'Freedman's' project done 11:12 a.m.
- Teen relive Mormon trek 11:12 a.m.
- Jazz brass debate Millsap match
- LDS seminary principal arrested
- 2 men cited on LDS plaza
- Jazz finances not quite so bleak
- Reactions on Boozer speculation
- HBO defends U. logo use in 'Love'
- Cash for Clunkers to get rolling soon
- Utahns among Texans' investors
- Jazz rookies quiet Thunder youngsters
- 10 years after the flood
- LDS seminary principal arrested
265 - Jazz brass debate Millsap match
175 - Bronco collecting a galaxy of recruits
141 - Jazz talking Boozer trade?
140 - 2 men cited on LDS plaza
131 - Blazers may offer Millsap a contract
124 - Stadium of Fire flag burning was fake
99 - Fairness of BCS debated
81 - Letters: Single-payer system best
75 - Services bids farewell to Jackson
70
By now you've probably read about the investigation that showed just how...
The photographs are mysterious, brooding, dark. They show dimples and...
Tommy is a Prophet, Seer and Revelator! Not there is a good myth!
The UAW are America workers who once build the largest corporation on earth...
@@mark B | 12:39 p.m. Even George W. Bush was against the surge until his...
It seems the Trail Blazers didn't do much to help themselves, but did do a...
As one who was once falsely accused of similar acts, but later the young girl...
REMEMBER WHAT HAPPENED WHEN UTAH GAVE TOO MUCH FOR OSTERTAG? iT SCREWED THEM...
These teens re-lived the hardships of the Mormon Trail? Such silly...
Guess what?!! The rest of the world thinks MORMONS ARE NOT MORAL!!!
@If I were Obama | 7:25 a.m. So funny. LMAO with this comment. Just...
"Fight the Power" is trying to make a civil rights analogy here that...




You can be the first to comment on this story.