- The Washington Times - Wednesday, November 26, 2003

ASSOCIATED PRESS

America’s manufacturers saw orders for big-ticket goods rise in October by the largest amount in more than a year, a sign that the economic recovery was on firm footing as the final quarter began.

The Commerce Department reported yesterday that new orders for durable goods — costly manufactured products expected to last at least three years — rose by 3.3 percent last month, up from a 2.1 percent rise seen in September.

In other economic news, consumer spending held steady in October, while people’s incomes grew by a solid 0.4 percent, the department said in a second report. The figures matched economists’ forecasts. The growth in income was encouraging because it provides a critical foundation for future spending.

New claims for unemployment benefits last week dropped by a seasonally adjusted 11,000 to 351,000, the lowest level since January 2001, the Labor Department said in a report that provided new evidence that the job market is turning around.

New-home sales, meanwhile, declined by 3.5 percent in October from the previous month to a seasonally adjusted annual rate of 1.1 million units, the Commerce Department said in another report. Even with the drop, October’s sales pace represented the fifth-best month on record and marked a 10 percent increase from the same month a year ago. Economists expect home sales to set a record for all of 2003.

October’s manufacturing performance was considerably stronger than economists were expecting. They were forecasting durable-goods orders to rise by 0.7 percent last month. The 3.3 percent increase represented the best showing since July 2002, when orders soared by 8.1 percent.

The strength in October was broad, with orders rising for communications equipment, machinery and primary metals, which includes steel. Orders placed for cars and computers, however, dipped.

The series of preholiday reports came as the Federal Reserve Board, in a separate announcement, said the business recovery picked up steam in October and early November. It said the improvements were “broadly based” and evident across the nation. In most parts of the country, retail sales were up and businesses were optimistic about the prospect of strong holiday sales.

The economy grew by a stunning 8.2 percent rate in the July-to-September quarter, the fastest pace in nearly two decades. That showing — along with a surge in consumer confidence in November — raised hopes for a lasting recovery.

Some analysts believe the economy is growing at a slower but still healthy rate of about 4 percent in the current October-to-December period, as some of the stimulus that helped in the third quarter — President Bush’s third round of tax cuts and a wave of mortgage refinancing — begins to fade.

In October, consumer spending held steady after dropping by 0.3 percent in September. Americans’ incomes grew by 0.4 percent last month, up from a 0.3 percent advance the previous month.

The spending and income figures are not adjusted for price changes.


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