November Big Ticket Orders Make Best Rise Since August

From Associated Press

Orders for “big ticket” durable goods, excluding the volatile defense category, shot up 1.8% in November, the best showing since August, the government reported today.

The Commerce Department said total durable goods orders edged up only 0.1% last month, but it said the overall figure was held back by a sharp 17.6% drop in military orders.

Excluding the defense decline, total orders would have risen by 1.8% following a 0.2% increase in October. It was the best showing since a 5.2% surge in non-defense orders in August.

Analysts were likely to view the latest report as a sign that the economy’s momentum is showing no signs of slowing as 1988 ends.


Throughout this year, almost half of total economic growth has been powered by a boom in U.S. export sales as American manufacturers benefited from a weaker dollar, which made their goods more competitive on overseas markets.

On Wednesday the Commerce Department reported continued healthy growth in Americans’ personal income, excluding special factors. Financial markets took the news in stride.

Not counting the special factors, personal income rose 0.6% in November and 0.8% in October, both significantly stronger than the inflation rate.

The department also said that personal consumption spending, which includes everything except interest payments on debt, rose 0.6% to a seasonally adjusted annual rate of $3.32 trillion last month after a robust 1.0% gain in October.


The numbers were in line with expectations and had little effect on financial markets. On Wall Street, the Dow Jones industrial average, down 6.61 on Tuesday, slipped another 1.43 points to 2,164.64.

Bond prices and interest rates were little changed.

“It looks like 1988 is going out with a bang,” said Robert Brusca, an economist with Nikko Securities Co. International in reference to the income and spending report.

But Brusca said the new statistics are likely to displease the Federal Reserve Board, which has been raising interest rates in an attempt to slow the economy.


The Fed’s goals are to slow inflation and to cool domestic consumer demand so that manufacturers can produce enough exports to whittle the U.S. trade deficit.

With spending rising faster than income in November, the personal savings rate--savings as a percentage of after-tax income--dipped to 4.3% from 5.2% in October.