‘Big-Ticket’ Orders Up Only a Slim 0.3%

Orders for “big-ticket” durable goods rebounded a smaller-than-expected 0.3% in June after a steep fall in May, the Commerce Department said today, providing a fresh sign that the economy is slowing.

The June rise came after a revised 4.4% fall in May. Economists, figuring that durable goods orders would rebound from May’s depressed level, had projected a much stronger gain of 1% or more.

The June rate was lifted by orders for machinery and electrical equipment and offset by falling orders for metals and transportation equipment.

The orders received by factories for long-lasting manufactured goods inched up $400 million to a seasonally adjusted $124.1 billion in June from the prior month. The orders were 1% below last year’s level.

The slack orders figure adds to the growing list of reports showing a general slowdown in the economy. Retail sales also have been weak, industrial production has fallen for two months in a row and the trade deficit jumped 24% in May, swelled in part by a slowdown in exports.

The modest rebound in durable-goods orders is unlikely to persuade economists that “big-ticket” sales, one of the most interest-rate-sensitive sectors of the economy because buyers must usually borrow to purchase them, are breaking out of their recent sluggish pattern.

The durable-goods report, despite the slight overall rise, contained a number of signs of weakness. Shipments fell 1.1% in June to $121.6 billion, the fifth decline this year.

Although unfilled orders were 10.9% higher than in June, 1988, showing that factories still have plenty of work on hand, the increase in June from the previous month was only 0.5% and was limited to a few industries.

Excluding orders received by defense contractors, which tend to be erratic from month to month, orders in June fell 0.7%, the department said.