Durable Goods Orders Rise But Capital Spending Weak

New orders for long-lasting U.S. manufactured goods surged in July on strong demand for transportation equipment, government data showed on Wednesday, but a gauge of business spending fell.

The Commerce Department said durable goods orders jumped 4 percent after a 1.3 percent drop in June. Economists had expected orders to rise 2 percent last month.

Though durable goods orders are extremely volatile, the data eased fears the economy was slipping back into recession, after a raft of weak sentiment surveys.

"It's consistent with the idea of positive growth but not especially strong. The underlying trend is certainly good," said Scott Brown, chief economist at Raymond James in St. Petersburg, Fla.

Orders last month were buoyed by a 14.6 percent jump in bookings for transportation equipment, which was the largest increase since January.

Excluding transportation, orders rose 0.7 percent after gaining 0.6 percent in June and confounding economists' expectations for a 0.5 percent fall.

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