U.S. companies invested last month in computers, communications equipment and machinery, boosting capital goods orders for the third time in four months.
The 4.1 percent increase to capital goods in August showed a rebound in business spending. Orders fell 5.3 percent in July.
The overall demand for durable goods fell 1.3 percent in August, the Commerce Department said Friday. But that was pulled down by a significant drop in orders for aircraft. When excluding the volatile transportation sector, orders rose 2 percent — the best showing in five months.
Manufacturing has helped drive economic growth since the recession ended in June 2009. Economists had worried that July's decline in spending on capital goods was a sign the sector was losing strength. August's figures suggests manufacturing activity is growing, but economists remain concerned about its sustainability.
Orders for machinery rose 3.9 percent in August after tumbling 9.6 percent in July. Demand for computers and related products was up 12 percent while orders for communications equipment rose 9.2 percent last month and orders for primary metals rose 2.4 percent.