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Durable goods rise outside volatile transportation

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U.S. companies invested last month in computers, communications equipment and machinery, boosting capital goods orders for the third time in four months.

The 4.1-percent increase to capital goods in August showed a rebound in business spending. Orders fell 5.3 percent in July.

The overall demand for durable goods fell 1.3 percent in August, the Commerce Department said Friday. But that was pulled down by a significant drop in orders for aircraft. When excluding the volatile transportation sector, orders rose 2 percent — the best showing in five months.

Manufacturing has helped drive economic growth since the recession ended in June 2009.

The capital goods category excludes transportation and defense goods. It is seen as a good proxy for business and economists watch it closely.

Business spending on equipment and software has been growing at a 20-percent annual rate over the past three quarters.

Economists had worried that July's decline in spending on capital goods was a sign that the sector was losing strength. August's figures suggest manufacturing activity is growing, but economists remain concerned about its sustainability.

"Though downshifting a tad, business capital spending remains one of the few consistent bright spots on the economic landscape," said Sal Guatieri, senior economist at BMO Capital Markets.

Orders for machinery rose 3.9 percent in August after tumbling 9.6 percent in July. Demand for computers and related products was up 12 percent. Orders for communications equipment rose 9.2 percent last month. Orders for primary metals rose 2.4 percent.

Durable goods are items expected to last at least three years, such as refrigerators, automobiles and washing machines.

The overall decline in August was the largest since a 2.6-percent decrease in August 2009 and the third overall decline in four months.

Demand for transportation goods fell 10.3 percent last month, after having been up 11.6 percent in July. The swing reflected a 40.2-percent plunge in orders for commercial airplanes, a volatile category which had surged 69 percent in July. Boeing Co. saw its orders climb to 103 planes in July and then drop to just seven planes in August.

Orders for motor vehicles and parts fell 4.4 percent in August after a 4.6-percent increase in July.

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  1. In reality, Lilly is maintaining profit by cutting costs such as Indiana/US citizen IT workers by a significant amount with their Tata Indian consulting connection, increasing Indian H1B's at Lillys Indiana locations significantly and offshoring to India high paying Indiana jobs to cut costs and increase profit at the expense of U.S. workers.

  2. I think perhaps there is legal precedence here in that the laws were intended for family farms, not pig processing plants on a huge scale. There has to be a way to squash this judges judgment and overrule her dumb judgement. Perhaps she should be required to live in one of those neighbors houses for a month next to the farm to see how she likes it. She is there to protect the people, not the corporations.

  3. http://www.omafra.gov.on.ca/english/engineer/facts/03-111.htm Corporate farms are not farms, they are indeed factories on a huge scale. The amount of waste and unhealthy smells are environmentally unsafe. If they want to do this, they should be forced to buy a boundary around their farm at a premium price to the homeowners and landowners that have to eat, sleep, and live in a cesspool of pig smells. Imagine living in a house that smells like a restroom all the time. Does the state really believe they should take the side of these corporate farms and not protect Indiana citizens. Perhaps justifiable they should force all the management of the farms to live on the farm itself and not live probably far away from there. Would be interesting to investigate the housing locations of those working at and managing the corporate farms.

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