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US factory orders rise 1.7 percent in September


ByMartin Crutsinger

AP Economics Writer

WASHINGTON (AP) — Orders to U.S. factories rose in September on a big jump in commercial aircraft demand. But businesses cut back sharply on machinery and other goods that signal their confidence to expand, signs of slower economic growth.

The Commerce Department said Monday that factory orders increased 1.7 percent in September from August. That followed a 0.1 percent decline in August and a 2.8 percent plunge in July.

The September gain was driven by a 57.7 percent jump in demand for aircraft.

But so-called core capital goods, which include machinery and electronics, fell 1.3 percent in September. And demand for machinery plummeted 23.6 percent, with big declines in construction machinery, electric turbines and generators.

The decline suggests businesses may have been worried about the economy before the 16-day partial government shutdown, which began on Oct. 1.

Economists pay close attention to core capital goods. They are viewed as a better gauge of companies’ plans to invest because they exclude more volatile orders for aircraft and defense equipment. The decline was the second in three months and points to weaker activity at factories in the July-September quarter.

Orders for durable goods, items expected to last at least three years, increased 3.8 percent in September, largely on the airplane gains. The big rise in demand for aircraft helped offset a 0.7 percent dip in demand for autos and auto parts. That decline is expected to be temporary given the strength in auto sales this year.

Demand for non-durable goods, such as chemicals, paper and food, edged down 0.2 percent.


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