Durable goods orders increase by most in 2 years

WASHINGTON (AP) — Orders for durable goods rose last month by the largest amount in two years, as the manufacturing sector rebounded from the depths of the recession.

The Commerce Department said Wednesday that orders for goods expected to last at least three years increased 4.9 percent in July, the third rise in the past four months. Analysts expected a 3 percent increase. Orders for June were revised up to a 1.3 percent drop, from a 2.2 percent decline.

The better-than-expected durable goods data followed positive readings Tuesday about consumer sentiment and home prices. A report on new homes sales due out later Wednesday morning may provide more good news if it shows a fourth straight increase in July as expected.

Orders for transportation equipment, which rose 18.4 percent, drove the overall increase in durable goods. Commercial aircraft orders, a volatile category, more than doubled after falling 30 percent in June. Motor vehicle orders increased 0.9 percent.

Excluding transportation goods, orders rose 0.8 percent. That was the third straight increase, but just below analysts' expectations of a 0.9 percent rise.