Factory Orders Jump; Jobless Claims Lie Low
Surging demand for electronic components and aircraft boosted manufacturing while unemployment benefit applications remained low, the government said Thursday in reports depicting a strong but not overheated economy.
“The reason everything is so wonderful is we’re not in a boom. We’ve got solid moderate growth that therefore can be sustained,” said economist David Orr of First Union Corp. in Charlotte, N.C.
Orders to U.S. factories jumped 1.3% in August to a seasonally adjusted $335.4 billion, the Commerce Department said. It was the third consecutive increase but overstated manufacturing’s momentum.
The strength was almost entirely concentrated in two categories. Orders for electronic components, such as semiconductors and circuit boards, soared 76.9%, the largest increase since February 1960.
Aircraft orders jumped 30.8%, spurred by retooling at U.S. airlines and demand from foreign carriers.
Without those two gains, orders overall would have been down 1.7%.
Moreover, a report Wednesday from the National Assn. of Purchasing Management showed manufacturing momentum slowed in September.
New applications for unemployment benefits inched up by 1,000 last week to 308,000, the Labor Department said. It was the first increase in a month but left claims at a level reflecting continued demand for workers.
A four-week moving average of claims, which analysts track because it smooths weekly fluctuations, fell by 4,250 to 308,750, the lowest since mid-August.
“It’s certainly at a level that fits with the idea that labor markets are extremely tight,” said economist Dan Laufenberg of American Express Financial Advisors in Minneapolis. “There’s all kinds of help-wanted signs everywhere and special programs to attract workers, such as finders fees and bonuses.”
Meanwhile, same-store retail spending in September rose just 0.4% over the same period a year ago, reported TeleCheck Services Inc. The Houston-based company compared the dollar volume of checks written at more than 27,000 locations.
William Ford, TeleCheck’s senior economic advisor, suggested the increase was so small because Princess Diana’s death and funeral kept many would-be shoppers home watching television.
August’s increase in factory orders included a 2.7% increase for durable goods--expensive items expected to last three or more years--and a 0.4% decline for nondurable goods.
Shipments of factory goods, a measure of current production, fell 0.8%. It was the first drop since May and attributed to the United Parcel Service strike.
