WASHINGTON (PNN) - August 25, 2010 - The economic Depression continues as companies cut back last month on their investments in equipment and machines and Amerikans bought new homes at the weakest pace in decades.

Overall orders for big-ticket manufactured goods increased 0.3% in July, the Commerce Department said Wednesday. But that was only because of a 76% jump in demand for commercial aircraft.

Taking out the volatile transportation category, orders for durable goods fell at the steepest rate since January; and business orders for capital goods took their sharpest drop since January 2009, when the economy was already mired in the Second Great Depression.

Separately, Commerce said new home sales fell 12.4% in July from a month earlier to a seasonally adjusted annual sales pace of 276,600. That was the slowest pace on records dating back to 1963. Collectively, the past three months have been the worst on record for new home sales.

The weak sales mean fewer jobs in the construction industry, which normally powers economic recoveries. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

The two reports are likely to stoke fears that the economy is continuing down the road to Depression. They follow Tuesday's report that showed sales of previously owned homes fell last month to the lowest level in decades. Unemployment remains near double digits and job growth in the private sector is slowing.

"The rebound in manufacturing was one of the bright spots in an otherwise disappointing (series of reports on the economy)," said Paul Ashworth, senior U.S. economist at Capital Economics. "Take it away, throw in a relapse in housing, and you don't have much left."