Wall Street Journal (08/26/15) Anna Louie Sussman; Eric Morath

Orders for durable goods increased a seasonally adjusted 2% in July from a month ago, according to the U.S. Department of Commerce. Economists polled by the Wall Street Journal said overall orders would increase 0.1%.

Businesses invested in new machinery, electronics, and other items, suggesting growing optimism about the economy. New orders for nondefense capital goods excluding aircraft increased for the second consecutive month. July’s increase of 2.2% was the biggest since June 2014.

Transportation orders drove July’s gains, increasing 4.7% from a month earlier. Automobile demand was stronger, while civilian aircraft orders declined 6%.

Federal Reserve Bank of Richmond (08/25/15)

Manufacturing conditions slowed in August in the Mid-Atlantic states, according to the Federal Reserve Bank of Richmond. The composite index flattened to a reading of 0. Shipments dropped sharply; the index lost 20 points to end at -4, and the index for new orders fell 16 points to finish at a reading of 1.

Manufacturing employment remained at a flat reading of 1 in August. The average workweek index edged up two points from July’s reading to finish at 3. Average wages continued to increase moderately, adding one point to end at 15. Survey participants looked for strong growth in hiring in the months ahead.

Wall Street Journal (08/25/15) Nick Timiraos

More Americans who left the workforce temporarily or who stayed out of the workforce because of weak job prospects will return in the coming years as demand for labor builds in the economy, according to a new report from the Congressional Budget Office. The report said that evidence shows that jobless spells have caused a less permanent stigma and erosion of skills than previously believed.

According to CBO, the U.S. labor market may contain more people than previously estimated who do not have jobs and have not been looking, which means that so far, they have not been counted in the official unemployment statistics. CBO director Keith Hall said the data now show that people are returning to the labor force a little bit faster than anticipated. CBO raised its estimate of the potential participation rate from the forecast issued in January. CBO also revised down its estimate of the rate of unemployment at which slack disappears, which also indicates more spare capacity in the labor market, to 5.1% from 5.4%.