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July 30, 2009

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Orders for durable goods fall

ORDERS to United States factories for big-ticket durable goods plunged last month by the largest amount in five months.

The Commerce Department yesterday said orders for durable goods fell 2.5 percent last month. It was the biggest setback since a 7.8-percent fall in January.

Much of the weakness reflected a 38.5-percent decline in orders for commercial aircraft, an industry that has been hurt by the global recession, which has crimped air travel and triggered some airlines to cancel orders for planes.

Orders for motor vehicles and parts fell by 1 percent last month after an even larger 8.7-percent drop in May. The weakness reflected the disruption caused by the bankruptcy filings of General Motors and Chrysler, plus the need for the industry to deal with a backlog of unsold cars.

Excluding the transport sector, orders for durable goods were actually up by 1.1 percent last month.

Demand for primary metals such as steel rose 8.9 percent, and industrial machinery was up 4.4 percent.

Many economists believe the economy will resume growing in the July-September quarter although they expect unemployment, now at a 26-year high of 9.5 percent, to keep rising until next year.


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