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Economy Briefs

COMMERCE

Muted May revenue growth reported by retailers

NEW YORK — Shoppers are showing signs of pulling back on spending on discretionary items such as clothing and home goods as gasoline and groceries eat up more of their paychecks.

Those pressures led many retailers on Thursday to report only modest revenue increases in May, the latest sign of the economy hitting a soft patch.

Most of the spring, consumers seemed to shrug off rising prices. Now, gasoline at more than $1 per gallon more than last year and higher grocery bills are "finally taking a bite and affecting sales," said Ken Perkins, president of research firm Retail Metrics. "It definitely raises the caution flag going into the summer."

Revenue rose 5.4 percent overall among 27 retailers at stores open at least a year, according to a preliminary tally by the International Council of Shopping Centers. But that was skewed by the strong positive effect gas price inflation had on retailers that sell gas such as Costco Wholesale and BJ's Wholesale Club. Excluding gas, retail revenue rose 3.7 percent.

Luxury stores are performing much better than stores that cater to middle- and lower-end consumers.

STOCKS

Groupon files for initial public offering

NEW YORK — Groupon Inc., an online daily coupon site, has filed for an initial public offering, capitalizing on investor infatuation with social media companies that have yet to prove they are the real deal.

The company filed to raise up to $750 million in its IPO, an offering that has been widely speculated about for months and comes hard on the heels of a number of hot technology debuts.

Other Internet companies including LinkedIn Corp. and China's Renren Inc. have had strong IPO premieres in recent months, causing speculation that other companies would rush to follow.

Thursday's IPO filing did not specify the number of shares to be sold in the IPO, the price range, or the exchange, though it did say the shares would trade under the symbol "GRPN." It also said the $750 million figure is preliminary and could change.

AUTO

Ford plans smallest engine ever

DEARBORN, Mich. — Ford Motor Co. plans to introduce its smallest engine ever by 2013, part of the race to improve fuel economy across the industry.

Ford said Thursday it's working on a one-liter, three-cylinder engine that will be available in small cars globally. Ford didn't say which cars will get the engine, but it plans to release more details this fall.

Currently Ford's smallest engine available in the U.S. is the 1.6-liter, four-cylinder used in the Ford Fiesta subcompact. That engine has 120 horsepower and gets up to 38 miles per gallon on the highway.

Ford says the new three-cylinder engine would match that power but be more efficient. The engine has Ford's EcoBoost technology, which uses turbocharging, direct injection and variable camshaft timing to boost performance. It's also about 20 pounds lighter than the four-cylinder, which helps fuel economy.

AIRPLANES

Boeing books orders for 7 new planes

CHICAGO — Boeing Co. says it has orders for seven new planes, including one 777 to be made for American Airlines.

The other orders comprise four more 777s and two 737s for unidentified customers. Boeing also identified Continental Airlines for the first time as the customer for 11 of its 737s.

Boeing also said it lost an order for one 737.

Boeing's 777 is used on long-haul routes and list prices can run as high as $284 million. Boeing makes more of the smaller 737s, which are generally used on shorter flights and sell for around $80 million before discounts.

Boeing has booked orders for 101 of the 737s so far this year, and for 66 of the 777s.

FACTORY

Orders fell in April after parts shortage

Businesses cut back on their orders for heavy machinery, computers and autos in April, partly because the March earthquake in Japan has made component parts harder to come by.

Orders to U.S. factories fell 1.2 percent in April and a measure that signals business investment dropped 2.3 percent, the Commerce Department reported Thursday.

Orders to factories totaled $440.4 billion in April on a seasonally adjusted basis. That's 31.1 percent higher than the recession low hit in March 2009.

Manufacturing has been one of the strongest areas of the economy since the recession ended. But it has shown signs of slowing in recent months. On Wednesday the Institute of Supply Management reported that its index of manufacturing activity expanded in May at the slowest pace in 20 months.

From wire dispatches and staff reports

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