1.5% Rise in Goods Orders Seen as Recovery Sign : Economy: Analysts also point to recent increases in retail sales and housing activity as positive indicators.
Factory orders for durable goods rose 1.5% in January, the government said Wednesday in a report seen as fresh evidence that the once-stalled economic recovery is starting to pick up.
Analysts also pointed to the recent increases in retail sales, including automobiles, and growing housing activity among other signs of a slowly improving economy.
“We’re now starting to see the resumption of the recovery, which may have started in the spring a year ago and stalled out in the fall,” said economist A. Lynn Reaser of First Interstate Bancorp in Los Angeles.
“We’re seeing the first glimmers of a revival in January,” concurred Stephen S. Roach, an economist with Morgan Stanley & Co. in New York. “It’s another tentative sign of an improved economic outlook in 1992.”
The Bush Administration also hailed the January increase as one of several indicators pointing to an economic rebound.
“I see robins on the lawn in the economy now,” said Treasury Secretary Nicholas F. Brady in a speech to the National Assn. of Business Economists.
Brady cited increased purchases of tires and light bulbs as signs that spending was picking up.
“I went out last weekend and bought two new tires,” he said, adding that many Americans probably would do the same after putting off purchases and, now, “this country’s tires are bald.”
But many analysts caution that economic growth will be below-average and will not result in any substantive improvement in employment for months.
Orders for durable goods--usually expensive items such as cars and computers expected to last more than three years--totaled a seasonally adjusted $119.6 billion in January.
Federal Reserve Chairman Alan Greenspan told Congress last week that the Fed also had seen signs that orders continued to rise in early February.
They had stalled in December, plunging 5.1% to $117.8 billion, after posting gains of 0.6% in November and 2.7% in October.
Reaser said the new gains in orders should “prompt a bit of a turnaround on the production front in the next several months. It’s the kind of ammunition we need for a recovery in the spring.”
Manufacturing production had declined for three straight months through January, costing thousands of jobs.
Analysts said the job losses contributed to the plunge in consumer confidence reported Tuesday by the Conference Board, a New York business research group.
But Roach said he places “a lot more credence” in automobile and other retail sales because they measure what consumers are doing rather than what they are saying.
Consumer spending, which represents two-thirds of the nation’s economic activity, is necessary to sustain any recovery.
Durable Goods Orders Climb New orders, in billions of dollars, seasonally adjusted Jan., ‘92: 119.6 Dec., ‘91: 117.8 Jan., ‘91: 117.8 Source: Commerce Dept.
