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Good News: Durable orders up 3 months in a row Led by rising demand for computers, cell phones and cars, orders for new durable goods increased 1 percent in July, the Commerce Department estimated Tuesday. It was the first time since early 1999 that orders have risen for three months in a row.
The outlook for business investment continued to improve as core capital goods orders rose 0.4 percent, also the third increase in a row. Read the full release.
Other economic news released Tuesday was also bullish. The consumer confidence index rose for the first time in four months in August while sales of new homes were at the second highest level ever in July.
The numbers had little impact on financial markets. U.S. stocks and bonds were lower most of the morning before mounting a late rally to finish higher. See Market Snapshot.
“The evidence is mounting that we’re having the predicted post-Iraq, summertime bounce in the economy,” said Stuart Hoffman, chief economist at PNC Bank. With the gradual recovery of business investment spending, the only missing piece in the recovery is job growth, he said.
The data on new orders and shipments of durable goods tend to be very volatile from month to month, so economists prefer to focus on longer trends spanning a quarter or a year.
“The underlying trend is pointing up,” Hoffman said.
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