Newspaper article THE JOURNAL RECORD

Orders for Factory Goods Increase; Initial Jobless Claims Decrease

Newspaper article THE JOURNAL RECORD

Orders for Factory Goods Increase; Initial Jobless Claims Decrease

Article excerpt

WASHINGTON (AP) -- The economic expansion celebrates its sixth birthday this month but is showing no signs of old age.

In fact, reports Thursday suggested it may be growing more sprightly, heightening concerns the Federal Reserve may boost interest rates soon to avoid overheating and igniting inflation.

U.S. factories reported a 2.5 percent increase in orders in January, more than expected, and a surprising drop in new claims for jobless benefits last week pushed the four-week moving average to an eight-year low. At the same time, major retailers reported modest sales gains in February as consumer optimism about the economy fueled some spending during the typically slow month. Most retailers, from discounters to upscale chains, reported better sales last month than a year ago. "The economy is moving full steam ahead," contended economist Sung Won Sohn of the Norwest Corp. in Minneapolis, saying there's a 50- 50 chance Fed policy-makers will raise rates at their March 25 meeting. "The next meeting's not until May 20, some eight weeks later, and I'm not sure Chairman (Alan) Greenspan wants to wait that long," he explained. Analysts believe a strong February employment report on today may be the deciding factor on whether to boost rates. Many say the jobless rate likely fell to 5.3 percent from 5.4 percent in January at the same time the economy created a quarter-million new jobs. The Commerce Department reported Thursday that factory orders for both durable and nondurable goods totaled a seasonally adjusted record $323.2 billion in January, up from $315.4 billion a month earlier. The previous high was $321.9 billion in October. The increase, biggest since last September, was broad-based and extended to every major category. Analysts had expected a smaller, 2 percent gain. Orders for durable goods, items such as cars and computers expected to last more than three years, jumped 4 percent, even higher than the 3. …

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