By Shobhana Chandra and Lorraine Woellert - Jul 26, 2012
Orders for U.S. durable goods climbed more than projected in June as a surge in demand for aircraft and military hardware overshadowed a slump in business equipment spending.
Bookings for goods meant to last at least three years rose 1.6 percent for a second month, a Commerce Department report showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 0.3 percent gain. A separate report today showed first-time claims for unemployment benefits declined more than forecast last week.
Orders for durable goods excluding the volatile transportation category unexpectedly dropped 1.1 percent in June, the most in five months. Corporate spending is contributing less to the expansion as cooler demand from U.S. consumers and weaker overseas sales crimp profits at companies such as Xerox Corp. (XRX)
Business investment, “which was a pillar of strength, has been chopped a bit,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York, who correctly projected the gain in durables orders. “Global activity has shifted lower. It is difficult for demand to gather much momentum at this stage.”