THE ECONOMY : Durable Goods Orders Edge Up 0.3% in June

Orders for big-ticket factory goods rose a modest 0.3% in June, the government said Tuesday in a report seen as evidence that manufacturing, although sluggish, isn’t crumbling.

The Commerce Department said orders for durable goods--items ranging from bicycles to battleships--advanced to a seasonally adjusted $124.1 billion last month. That followed a 4.4% decline in May, the sharpest in 10 months.

“This is basically in line with the forecast of modest growth but no recession,” said economist Michael K. Evans, who heads a consulting firm in Washington.

Robert G. Dederick, chief economist of Northern Trust Co. in Chicago, said the report likely means the Federal Reserve won’t be in a rush to cut interest rates soon.

‘Treading Water’

“The report could have triggered action if it was really weak, but it wasn’t . . . . It suggests we’re continuing to tread water in manufacturing, but the sector isn’t crumbling,” he said.

The Fed recently shifted gears after a yearlong campaign of fighting inflation with higher interest rates, allowing two small declines in short-term rates since early June. Most analysts expect the central bank to continue nudging rates lower, but slowly and cautiously.

The rebound in durable goods orders was powered by a 15.8% jump in military orders to a seasonally adjusted $8.8 billion. The highly volatile category registered drops of 11.4% in May and 18.3% in April.

Excluding defense, new orders fell 0.7% last month following a decline of 3.9% in May. The June activity was depressed by softness in auto manufacturing that offset an upturn at factories producing machinery.

The closely watched category of non-defense capital goods, a barometer of business investment plans, rose 0.5% in June to $37.5 billion following a 7.7% plunge a month earlier.

Non-electrical machinery orders rose 3.7% to $23.1 billion, reflecting an increase in purchases of steam engines and turbines.

Electrical machinery gained 2.8% to $19.2 billion following a 6.1% drop in May.

Transportation equipment declined 3.5% to $32.3 billion.

DURABLE GOODS ORDERS Billions of dollars, seasonally adjusted; June ‘89: 124.1 Source: Commerce Department