Newspaper article THE JOURNAL RECORD

Reports Indicate Growth in U.S. Economy Remains Strong

Newspaper article THE JOURNAL RECORD

Reports Indicate Growth in U.S. Economy Remains Strong

Article excerpt

WASHINGTON (Bloomberg) -- Home resales rose at a record pace in February and U.S. factories booked solid orders for big-ticket items, signs of strength that confound predictions growth will taper off this year.

"What slowdown? There's no evidence of a slowdown in the overall economy," said John Ryding, senior economist at Bear Stearns in New York.

Sales of existing single-family homes rose 8.7 percent last month to a record annual rate of 4.75 million, up from January's 4.37 million, the National Association of Realtors said. The Commerce Department, meanwhile, reported that excluding transportation equipment, orders for durable goods rose 0.5 percent in February, the seventh increase in nine months. Overall durable goods orders fell 1.7 percent, chiefly because of a big drop in orders at Boeing. February shipments, a gauge of current activity, increased. Federal Reserve policymakers had predicted a drop in export demand from Asia would slow growth this year to less than 2.75 percent. Most private economists have now revised their estimates for first quarter growth to well above that pace, and some now see the stronger-than- expected performance extending into the following three months. "We're looking at a very healthy first two quarters," said Michael Englund, chief economist at Standard & Poor's MMS in Belmont, Calif. "The Fed is going to find it increasingly difficult to use Asia as a reason for assuming a slowdown this year." "We're seeing more and more of the Fed policymakers start to question just how much of a negative impact Asia is going to be," said Jerry Zukowski, economist at PaineWebber in New York. "If we don't get a slowing by the middle of the summer, we're going to get higher interest rates." Rather than holding down the economy, Asia has been a net benefit so far, analysts say. Because investors have flocked to the safety of U.S. government securities, interest rates have fallen and that's boosted housing and other consumer spending. …

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