Newspaper article THE JOURNAL RECORD

July Factory Orders Show Economy Far from Slowing

Newspaper article THE JOURNAL RECORD

July Factory Orders Show Economy Far from Slowing

Article excerpt

WASHINGTON (AP) -- Orders to U.S. factories for durable goods climbed 1.6 percent in July, the government said in a report Friday that some analysts said showed little sign of an anticipated economic deceleration.

"It shows the economy is still very healthy," said economist Gary Thayer of A.G. Edwards & Sons, a St. Louis stock brokerage."If it's slowing down, it's not slowing down significantly."

Amid other signs recently the economy may be braking on its own with few indications of inflation, Federal Reserve policy makers declined to raise short-term interest rates earlier this week.

But Fed Chairman Alan Greenspan told Congress last month that if economic growth does not slow soon, the central bank will be forced to boost rates to avoid a surge in prices. Fed policy makers next meet on Sept. 24.

The Commerce Department report aggravated those inflation concerns on Wall Street, where stock and bond prices fell and interest rates rose.

The report contained little suggestion of slowing in the industrial sector, which exhibited weakness earlier in the year when orders fell during three of the first four months.

It said most major categories shared in the orders growth to a seasonally adjusted $172.7 billion, up from $170 billion in June. Durable goods are products such as cars and computers expected to last more than three years.

The advance was the second in three months, including a big 4.2 percent jump in May. Orders had slipped a revised 0.2 percent in June, which was less than the original 0.8 percent estimate.

Also suggesting strength was a 1 percent increase in unfilled orders, the 10th advance in 11 months. A growing backlog suggests businesses may have to increase production facilities and manpower to meet demand.

Shipments, a measure of current activity, also advanced, a 0.7 percent gain that erased a 0. …

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