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New Computer Orders And Shipments Slump In August

The 2.3% decline in new orders for computers and 10.5% drop in shipments reported by the Commerce Department follows two months of increases in both categories.
New orders for durable computer and related equipment slipped by 2.3% as shipments fell by 10.5% in August, the Commerce Department reported Thursday. That followed two months of increases in both categories. Unfilled orders and total inventories last month rose 3.5% and 0.8%, respectively.

For all durable goods--manufactured products designed to last three years or longer--shipments last month fell 2.9% and new orders declined 0.9%. Inventories dipped 0.5% while unfilled orders rose 0.7%.

Why such weakness now? "The rise in the price of oil took purchasing power of the system," says economist Irving Leveson, president of ForecastCenter.com. "Also, concerns on how the war is going is starting to have an impact on the economy."

Still, Leveson says, the weaker August numbers represent a blip in the economic recovery. In a stronger recovery, he says, companies and consumers would spend much more on all types of durable goods, including computer products. "This recovery" he says, "is still a very modest one."