New orders for long-lasting U.S. manufactured goods surged in July on strong demand for transportation equipment, according to government data released on Wednesday, Reuters reported. A separate report indicated that sales in the public transit sector are flat or declining, however.

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 that 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, confounding economists’ expectations of a 0.5 percent fall.

A study released this morning by the American Public Transportation Association (APTA) indicated that 74 percent of private sector businesses serving the public transit industry experienced flat or declining business in the past year due to uncertainty in federal investment, a down economy and a lack of investment on the state and local level.  Of those reporting a decrease in business, the average decrease was 25 percent.   

The APTA used the study to warn against further cuts in infrastructure spending. The U.S. House of Representatives is considering legislation that would further cut federal investment in public transportation by more than 35 percent.  According to the U.S. Senate Banking Committee, the proposed cuts could lead to the loss of 141,000 jobs.