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* Durable goods orders rise record 22.6 percent in July
* Transportation orders surge a record 74.2 percent
* Core capital goods orders slip, but trend solid
* Home price appreciation slows further in June
By Lucia Mutikani
WASHINGTON, Aug 26 Orders for long-lasting U.S.
manufactured goods posted their biggest gain on record in July
on strong overseas demand for aircraft, and the underlying trend
also remained firm, pointing to brisk economic growth.
Durable goods orders, items ranging from toasters to
aircraft that are meant to last three years or more, jumped 22.6
percent last month after an upwardly revised 2.7 percent
increase in June, the Commerce Department said on Tuesday.
Transportation orders rose a record 74.2 percent as bookings
for civilian aircraft more than tripled. Boeing had said
earlier it received a record 324 aircraft orders in July. At the
same time, orders for autos logged the biggest gain in five
Outside of transportation, demand was decidedly softer.
Still, upward revisions to the data for June as well as a
pick-up in business investment plans, shipments and order
backlogs suggested a strong underpinning for growth.
"This report reinforces the message that manufacturing
growth is picking up and is likely to support stronger GDP
growth in the second half of the year," said John Ryding, chief
economist at RDQ Economics in New York.
U.S. stocks traded higher, with the Dow Jones industrial
average reaching an all-time intraday high, with Boeing
shares up 0.4 percent. Prices for U.S. Treasury debt rose, while
the dollar was flat against a basket of currencies.
Helping bolster investors' spirits, the Conference Board
said consumer confidence hit its highest level in nearly seven
years in August. A gauge of households' perceptions of the labor
market touched its best level since July 2008.
A separate report, however, showed house price growth
continued to slow in June. The S&P/Case Shiller's national house
price index rose 6.2 percent from a year ago, the smallest gain
since November 2012 and down from a 7 percent rise in May.
The housing sector cooled abruptly last year as mortgage
rates moved higher, with a lack of supply also crimping sales.
Economists think slower price appreciation will help keep the
housing recovery on the rails.
STRONG AUTO ORDERS
Many of the Boeing orders, including 150 planes by the
Dubai-based airline Emirates, were for a new version
of its top-selling twin-aisle 777 jet, which is still under
development and sells for about $377 million at list price.
The aircraft is due for delivery in 2020. It will take at
least 10 years for the resulting increase in production from the
orders, which also included the Dreamliner jet, to filter
through to U.S. gross domestic product.
The report on durable goods orders showed demand for
non-defense capital goods orders excluding aircraft, a closely
watched proxy for business spending plans, slipped 0.5 percent
But the decline followed an upwardly revised 5.4 percent
advance in June and bolstered perceptions that business spending
is rising. These core capital goods orders were previously
reported to have increased 3.3 percent in June.
Shipments of these goods, which are used to calculate
equipment spending in the government's GDP measurement,
increased 1.5 percent last month, helping to prompt Morgan
Stanley to raise its third-quarter growth estimate by
five-tenths of a percentage point to a 3.5 percent annual rate.
Barclays lifted its estimate by 0.3 percentage points to 2.7
Unfilled orders for core capital goods increased 1.1 percent
last month after rising 1.7 percent in June, showing a steady
pipeline of work that will keep the nation's factories humming.
"There is plenty of gas in the tank for continued growth in
business spending," said Tim Quinlan, an economist at Wells
Fargo Securities in Charlotte, North Carolina.
(Reporting by Lucia Mutikani, additional reporting by Alwyn
Scott, Sam Forgione and David Gaffen in New York; Editing by Tim
Ahmann and Paul Simao)