Factory Orders Rise 0.7%; New Home Sales Fall 5.5%
The government reported Tuesday that orders to U.S. factories for manufactured goods increased 0.7% in March, but analysts still saw signs in the report that the economy was cooling off.
Meanwhile, in another measure of the nation’s economic activity, new single-family home sales declined 5.5% in March to a seasonally adjusted annual rate of 587,000 after a revised 10.5% loss in February.
The report on factory orders showed that orders for durable and non-durable goods rose to a seasonally adjusted $232.9 billion in March after dropping 2% in February and 1.2% in January, the Commerce Department said.
The gain was propelled by a big jump in transportation orders, which surged 10.1% on the strength of a 48.3% increase in orders for aircraft, missiles and parts.
Excluding transportation, a category that is subject to wide swings depending on when big contracts are signed, all other orders were down 0.9% in March after declining 1% in February.
Analysts said the report added to signs that economic growth is slackening but also demonstrated that the economy still has some strength left.
“I don’t think the economy is as weak as some of the recent signs have been showing,” said economist John Hagens of the WEFA Group in Bala-Cynwyd, Pa. “Calling it a full-fledged slowdown right now is a little bit premature.”
Hagens said that with aircraft manufacturers already holding big backlogs of unfilled orders, the latest surge in orders in that category was unlikely to have much immediate effect on economic activity.
He said the report showed some strength in orders for computers and other equipment, while demand in construction-related industries remained weak.
Orders in the volatile defense category, which overlaps transportation, also showed strength in March, rising 28.8% after an increase of 19.7% in February.
Excluding defense, all other orders in March were down 0.3% after falling 2.7% in February.
Housing figures showed that sales of new single-family homes fell in the West more than in any other region during March, but soared in the Northeast, the Commerce Department said.
The national level of sales in March was the lowest since an annual rate of 576,000 in January, 1988, and was 11.7% under the March, 1988, annual rate of 665,000, the Census Bureau said.
In the West, new one-family home sales plummeted 20.5% in March to an annual rate of 155,000.
First-quarter median prices for new one-family homes advanced 6.2% in the West to $137,000 from $129,000 in the last three months of 1988. Nationwide, median prices increased 4.5% to $119,000 from $113,900.
FACTORY ORDERS
Total new orders in billions of dollars, seasonally adjusted.
March, 1989: $232.9 billion dollors, up 0.7%
Source: Commerce Department
NEW HOME SALES
Seasonally adjusted annual rate, thousands of units.
March, 1989, rate: 587,000 units, down 5.5%
Source: Commerce Department
