Manufacturing order levels give hope in US

Durable goods orders jumped four per cent, the Commerce Department said yesterday as demand for cars and aircraft surged, more than wiping out June’s 1.3 per cent drop. The rise was double economists’ expectations.

But non-defence capital goods orders excluding aircraft, a closely watched indicator of business spending, fell 1.5 per cent after rising 0.6 percent.

Economists noted this core capital goods category tends to be weak in the first month of a quarter and were encouraged that shipments of these goods, which go into the calculation of gross domestic product, had risen.

Since July, however, share prices have dropped sharply and consumer confidence has taken a hit, suggesting the report on durable goods – items from toasters to aircraft meant to last three years or more – could be offering a rosier view of the economy than is really warranted.