Reports Show Economic Strength in Many Sectors

Americans continue to spend freely, manufacturing is reviving, construction is booming and unemployment benefit applications are hovering at a 25-year low--all signs of the economy’s continued brisk advance.

“We’ve got strength pretty much across the board,” said economist Sung Won Sohn of Wells Fargo & Co. in Minneapolis. “People who’ve been anticipating an economic slowdown will have to wait a while longer.”

Reports on a wide range of sectors Thursday all pointed to an economy that, in the first quarter at least, showed little sign of suffering from overseas economic turmoil.

In March, manufacturing grew for the second consecutive month, with both new orders and production gaining momentum, corporate purchasing executives told the National Assn. of Purchasing Management in New York.

U.S. factories’ recovery has been spurred by strong demand at home, offsetting an anemic appetite abroad for U.S. goods. Consumer spending in February jumped a seasonally adjusted 0.7%, pushed higher by heavy auto sales, the Commerce Department said.

Meanwhile, personal income increased a healthy 0.6%. But, because spending growth slightly outpaced income growth, the nation’s savings rate again lapsed into negative territory.

It was minus 0.2% in February, marking the fifth time in six months that the rate was at or less than zero. Consumers are fueling their purchases not only with wages, which grew 0.7%, but also by cashing in some of their stock market gains and tapping their home equity in refinancings.

Demand for labor remains strong. First-time claims for unemployment benefits held at less than 300,000 last week for the ninth consecutive week, a stretch unprecedented since 1973. They fell by 6,000 to 289,000, the Labor Department said.

Construction was led by a 4.7% surge in government projects, reflecting a big increase for highways and streets. Commercial construction increased 3.9%.