Newspaper article THE JOURNAL RECORD

Orders for Durable Goods Surge

Newspaper article THE JOURNAL RECORD

Orders for Durable Goods Surge

Article excerpt

WASHINGTON (AP) _ In the latest sign of a strengthening economy, factory orders for durable goods rose for a fifth straight month in December. The increase helped make last year the biggest gainer since 1988, despite the lowest level of defense spending in more than a decade.

Economists said the surge reported Thursday _ led by business investment in computers and other equipment _ pointed to expansion this year despite a likely slowdown in consumer spending in the first half of 1994.

"Despite slow growth in the economy as a whole, equipment investment has continued to show remarkable buoyancy," said George Richards, economist for the National Association of Manufacturers.

"The capital goods boom continues," said Commerce Secretary Ron Brown.

But Sung Won Sohn, an economist with Norwest Corp. in Minneapolis, interjected a note of caution.

"The important question is how long can this spending spree continue in view of the low savings rate," he said. "Will businesses find they're stuck with unwanted inventory?"

Durable goods orders are a key barometer of manufacturing industry plans. Increased orders often lead to more production and jobs.

In other economic news: The government said the number of Americans applying for initial unemployment benefits declined by 56,000 last week, due in part to the effects of frigid weather, a federal holiday and the California earthquake.

The Labor Department said a seasonally adjusted 309,000 people sought benefits for the first time in the week ended Jan. 22, down from a revised 365,000 the previous week. Congressional budget analysts predicted the 1994 federal deficit will dip to $223 billion, $68 billion less than they projected a year ago. The figures are similar to those of the Clinton administration and in part reflect an improving economy and continuing low interest rates.

The fiscal 1993 deficit was $254.9 billion, down from a record $290.2 billion in fiscal 1992.

The Commerce Department reported that orders for durable goods rose 8.6 percent last year, including a broad-based 2.2 percent increase in December. It was the fifth straight monthly advance, the longest string since 1987 when orders rose each month from February through July. …

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