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New orders for manufactured big-ticket items rose in September, but much of the growth has been attributed to defense spending.
The US Census Bureau said new orders for durable goods rose 0.8% to $207.8 billion. The surprise gain marks the fourth increase in the last five months, following a revised 5.5% drop in August.
Economists had expected a 1% decline in big-ticket new orders.
The report shows that the private sector is weak and military spending accounts for the overall gain in new orders for long-lasting goods, according to economist Bob Brusca.
"The military sector is behind any strength in the economy, and it's not a good sign, because it doesn't drive growth," Brusca said.
Defense orders for capital goods increased 19.6% to $11.8 billion. Non-defense orders for capital goods in September increased 0.8% to $69.3 billion.
Excluding defense, new orders decreased 0.6%. Excluding transportation, new orders decreased 1.1%.
A surge in unfilled orders for manufactured goods is a relative bright spot in the report, Brusca said.
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