America’s factories saw orders for costly manufactured goods in July post the biggest gain in four months. New homes sales, meanwhile, slid, according to a pair of reports that offered a mixed picture of economic activity.

The Commerce Department reported yesterday that orders for durable goods – big-ticket items expected to last at least three years – rose 1.7% in July from the previous month – lifted by stronger demand for goods including airplanes, machinery, and communications equipment.

The increase – the largest since March – followed a 1.1% advance in June. The showing in July was stronger than the 1% rise that some economists were forecasting.

Jerry Jasinowski, president of the National Association of Manufacturers, said the latest durables report offered “solid evidence that the manufacturing recovery is on track.”

A second report from the department showed that sales of new homes declined by a sharp 6.4% in July from the previous month to a seasonally adjusted annual rate of 1.13 million units. The decline was steeper than analysts were expecting and left home sales at their lowest level since December.

Sales in June declined 5.6%, according to revised figures, which showed sales were even weaker than previously reported.

The drop in home sales comes amid a sluggish jobs climate and high energy prices, which may have made some people wary of making big financial commitments, analysts say.

Even with the slowdown, David Seiders, chief economist at the National Association of Home Builders, said he thinks sales of both new homes and previously owned homes are still are track to hit record highs for all of 2004. “There’s been some cooling, but the housing market is still in very, very good condition,” he said.

In the manufacturing report, orders for all transportation equipment rose 5.6% in July, the biggest gain since February, mostly reflecting stronger demand for airplanes. In June, transportation orders rose 4.7%.

Excluding orders for transportation equipment, bookings for all other goods nudged up 0.1% in July, an improvement from the 0.3% decline in June. Orders for machinery in July increased 2.1%, up from a 1.1% rise the month before.

For communications equipment, orders rose 5.1% in July, compared with a 4.4% drop in June. Orders for electrical equipment and household appliances increased by 5% in July, a turnaround from the 5.5% decline recorded for June.

Orders for non-defense capital goods jumped 9% in July. That was the largest rise since July 2002 and followed a 1.1% advance in June. The category is watched closely by economists as an indication of businesses’ plans to boost spending on equipment and other goods to modernize.

There were some soft spots: orders for automobiles dropped 5.3% in July, the largest decline in nearly a year. Orders for computers and fabricated metal products also showed declines.

In the housing report, new-home sales in July fell in every region except for the Midwest, where sales climbed to a new record annual rate of 260,000 units, representing a 21.5% jump from June’s level.

Sales declined 23.5% in the Northeast to an annual rate of 62,000. In the South, sales dropped 15.9% to a pace of 522,000 and in the West, they dipped 1.7% to a rate of 290,000.