Durable Goods Orders Down; Jobless Count Up : Economy: Consumer spending was up only slightly last month, another report says. Economists expect very little growth this quarter.
In a rash of discouraging economic news Thursday, the government said factories received sharply fewer orders for durable goods in December and more people sought jobless benefits through the middle of this month.
A separate report said consumers’ spending was up only slightly last month. Personal income was up, but that was partly due to rising jobless payments because of the national economic slump.
U.S. businesses--and the Bush Administration--are anxiously seeking any sign of revival. But Gilbert Benz, an economist with Swiss Bank Corp. in New York, said the reports suggested that “there basically will be no growth in the first quarter of this year.”
“The economy is kind of standing on rubbery legs,” concurred economist Robert G. Dederick of the Northern Trust Co. in Chicago.
The Commerce Department reported that orders for long-lasting, usually expensive durable goods such as cars and computers fell to a seasonally adjusted $117.7 billion in December. The 5% decline was the largest since orders plunged 11.2% in November, 1990.
Orders were down 4.6% for all of 1991, the largest loss since the recession year of 1982. Transportation orders were down 13.9% in December, accounting for most of the overall decline. If not for the transportation problems, total orders would have been down just 1.6%.
On the other hand, military orders soared 86%, and without that gain the overall orders decline would have been a staggering 8.9%. Military hardware orders are expected to decline in coming months because of cutbacks in the Pentagon budget.
The Commerce Department also said consumer spending slowed to a 0.3% gain from November’s 0.4% increase. Spending was up just 3.9% for the year after rising 6.4% in 1990.
Larry Meyer of Laurence H. Meyer & Associates, a St. Louis economic forecasting service, said: “Confidence is still down; the unemployment rate will probably continue to grow. We’re not likely to see much more than 1% growth in consumption in the first quarter.”
Decline in Durable Orders
New orders, in billions of dollars, seasonally adjusted Dec., ‘91: 117.7 Nov., ‘91: 123.9 Dec., ‘90: 12.2
Source: Commerce Department
Personal Income, Spending Climb
Income
Trillions of dollars, seasonally adjusted annual rate.
Dec., ‘91: 4.92 Nov., ‘91: 4.87 Dec., ‘90: 4.79
Spending
Trillions of dollars, seasonally adjusted annual rate.
Dec., ‘91: 3.95 Nov., ‘91: 3.94 Dec., ‘90: 3.82
Source: Commerce Department
