Orders for big-ticket manufactured goods ticks up just 0.4%

FILE - In this Sept. 23, 2019, file photo, clothes dryers, top, are stacked on top of washing machines at a Home Depot store location, in Boston. Orders to U.S. factories for big-ticket manufactured goods increased a weak 0.4% in August following a much larger July gain. The Commerce Department reported Friday, Sept. 25, 2020 that the August advance marked the fourth consecutive increase but was far lower than the 11.7% surge seen in July. (AP Photo/Steven Senne, File) (Copyright 2019 The Associated Press. All rights reserved)

WASHINGTON – Orders to U.S. factories for big-ticket manufactured goods increased just 0.4% in August following a much larger gain in the previous month.

It was the fourth consecutive monthly increase, but the most recent uptick was far weaker than the 11.7% surge in July, the Commerce Department reported Friday.

Economists had expected production to ease somewhat after manufacturers rebounded strongly in previous months from COVID-19 related shutdowns, but the growth in August was less than half what economists had projected.

A key category that tracks business investment plans rose 1.8% in August, compared with gains of 2.5% in July and 4.3% in June.

Economists appear divided over how to interpret the data. Some saw the string of positive numbers as a hopeful sign of a strong bounce back. Others, however, believe the modest advance overall signals that manufacturing appears paced for a slow recovery now that an initial boost from re-openings and government aid has faded.

“We're now in Phase 2 of this recovery, in which the economy will face persistent headwinds of the Covid-19 crisis without the support of meaningful fiscal stimulus and as a vaccine still remains absent,” said Oren Klachkin, lead U.S. economist at Oxford Economics.

The report showed that the volatile transportation sector rose a modest 0.5% as orders for motor vehicles and parts fell 4%, after a 21.7% surge in July as auto plants reopened.

Excluding transportation, orders would have risen 0.4%.

The changes left total orders at a seasonally adjusted $232.8 billion in August.