Factory and Housing Reports Give Mixed Signals on Economy : Commerce: Factory orders drop 0.1% in February. Home sales nationwide jump 9.3%.

Lower factory orders for durable goods and sharply higher existing-home sales gave conflicting signs about the economy Wednesday.

Plunging demand for military equipment reduced factory orders 0.1% in February. Excluding the 19.4% drop in the defense category, durable goods orders rose 1.3%.

Sales of existing homes, meanwhile, shot up in February as buyers rushed to take advantage of low mortgage rates.

Gordon Richards, an economist with the National Assn. of Manufacturers, said the report “is consistent with the slow overall course of economic activity.”

“It signals a weak and uneven recovery,” said economist David Jones of Aubrey G. Lanston & Co., a New York securities dealer. “The real question is, is it sustainable?”

Most analysts project 3% economic growth this year, compared to an average of 6% during the first year of recovery from other recessions after World War II.

Overall, orders for durable goods--items such as cars and communications equipment expected to last more than three years--fell to a seasonally adjusted $120.5 billion, the Commerce Department said.

After declining 5% in December, orders rose 2.4% the following month, to $120.6 billion. The January advance was first estimated at 2.2%. Orders, a gauge of future manufacturing activity, had peaked at $134.4 billion in December, 1988.

The National Assn. of Realtors, meanwhile, reported that sales of previously owned homes rose 9.3% in February to a seasonally adjusted annual rate of 3.52 million.

The rate, up from 3.22 million in January, was the highest since 3.62 million in January, 1989. The percentage gain was the steepest since a 12.2% advance in January, 1983.

Sales rose in all regions of the country in February as mortgage rates began climbing from an 18-year low just a month earlier.

The Commerce Department report showed that military orders fell 20.0% in January after soaring 89.4% a month earlier, illustrating their volatility.

But analysts said the overall trend will be down as the government cuts back expenditures with the end of the Cold War.

“Any region of the country . . . that had defense-type activity will continue to be hurt by cutbacks,” asserted Evelina M. Tainer of Prime Economic Consulting, a Chicago forecasting service.

Unfilled orders fell 1.0%, the sixth consecutive decline. These orders, now at their lowest level since September, 1989, measure whether production facilities and manpower are sufficient to keep up with demand.

“It suggests there will be no great urgency in hiring new workers,” Jones said. “It hints that the employment situation will remain soft.”

Shipments of durable goods, a measure of current production, were up 2.9%, the 10th increase in 11 months.

Transportation orders rose 1.0% after advancing 1.9% in January. Demand for automobiles and railroad equipment more than offset decreases in aircraft, shipbuilding and tank orders. Excluding this category, orders fell 0.4%.

The only other major category posting a gain was primary metals, up 7.9% after rising 2.2% a month earlier.

Orders for electronic and other electrical machinery fell 1.9% after a 5.0% decline in January. Orders for industrial machinery and equipment were down 1.4% in February after increasing 5.9% the previous month.

Durable Orders Slip, Home Sales Rebound Durable Goods Orders New orders, billions of dollars, seasonally adjusted Feb., ‘92: 120.5 Jan., ‘92: 120.6 Feb., ‘91: 117.5 Source: Commerce Department

Existing Home Sales Seasonally adjusted annual rate, million of units Feb., ‘92: 3.52 Jan., ‘92: 3.22 Feb., ‘91: 3.06 Source: National Assn. of Realtors