WASHINGTON, Sept 27 (Reuters) - New orders for key U.S.-made capital goods increased more than expected in August and shipments maintained their upward trend, pointing to underlying strength in the economy despite an anticipated drag to growth from Hurricanes Harvey and Irma.
The Commerce Department said on Wednesday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 0.9 percent last month after an upwardly revised 1.1 percent gain in July.
Economists polled by Reuters had forecast orders of these so-called core capital goods increasing 0.3 percent last month after a previously reported 1.0 percent jump in July. Core capital goods orders surged 3.3 percent year-on-year.
Shipments of core capital goods rose 0.7 percent after advancing 1.1 percent in July. Core capital goods shipments are used to calculate equipment spending in the government's gross domestic product measurement.
The Commerce Department said it was unable to isolate the effects of Hurricanes Harvey and Irma on the data as the survey is "designed to estimate the month-to-month change in manufacturing activity at the national level and not at specific geographic areas."
Harvey, which devastated parts of Texas, has hurt August retail sales, industrial production, homebuilding and home sales. As a result, the storms are expected to weigh on third-quarter economic growth.
Business investment has been buoyed by the energy sector, where oil and gas drilling has rebounded after declining in the wake of a collapse in crude oil prices.
That is helping to support manufacturing, which accounts for about 12 percent of the U.S. economy.
Last month, orders for machinery rose 0.3 percent after being unchanged in July. There were also increases in orders for primary metals, computers and electronic products, and transportation equipment.
Overall orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, surged 1.7 percent last month as bookings for transportation equipment jumped 4.9 percent.
Durable goods orders fell 6.8 percent in July. Boeing reported on its website that it received 33 aircraft orders in August, sharply up from 22 in the prior month.
Orders for motor vehicles and parts rose 1.5 percent in August after declining 2.1 percent in July. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)