- The Washington Times - Wednesday, November 24, 2004

ASSOCIATED PRESS

America’s factories saw orders for big-ticket goods drop in October after brisk activity in the previous month, highlighting the sometimes bumpy recovery experienced by the nation’s manufacturers.

The Commerce Department reported yesterday that orders for durable goods — costly manufactured products expected to last at least three years — decreased by 0.4 percent in October from September.

Factory activity was weighed down last month by weakness in new bookings placed for automobiles, computers, electrical equipment and primary metals, which includes steel.

The performance disappointed economists, who were forecasting a 0.5 percent increase in durable-goods orders for October.

Still, there were some aspects of yesterday’s report that tempered their disappointment. Orders for durable goods in September jumped by 0.9 percent from the previous month, according to revised figures. That turned out to be considerably stronger than the government previously estimated.

Shipments of durable goods for October — a good barometer of current demand — rose by a solid 0.6 percent. That compared with a 1.1 percent drop in September.

“Even with today’s decline, durable goods orders show fairly healthy growth over the past few months,” said Mark Vitner, an economist at Wachovia.

Other economic news, also released yesterday, was upbeat:

• Sales of new homes increased by 0.2 percent in October from the previous month to a seasonally adjusted annual rate of 1.23 million homes, the third-highest level on record, the department said in a second report.

The latest snapshot of housing activity was better than economists were anticipating. They were predicting sales would go down in October.

• New claims for unemployment benefits last week fell by a seasonally adjusted 12,000 to 323,000, a three-month low, the Labor Department reported. That showing also was better than economists were expecting. They were forecasting a small rise in new applications. The report suggested that the labor market recovery is gaining traction.

The four-week moving average of claims, which smooths out weekly fluctuations, dropped last week to 332,000, the lowest level since Nov. 18, 2000.

Encouraged by recent economic activity, Federal Reserve Chairman Alan Greenspan and his colleagues agreed earlier this month to boost short-term interest rates by one-quarter percentage point to 2 percent. A growing number of economists think the Fed may raise rates for a fifth time this year on Dec. 14, its last meeting for 2004.

Looking ahead to his second term at the White House, President Bush says his economic agenda will focus on simplifying the nation’s tax code and reforming Social Security.

He also wants Congress to make his tax cuts permanent. Democrats, including Mr. Bush’s former rival for the presidency, Sen. John Kerry of Massachusetts, contend that the president’s tax cuts have mainly helped the wealthy and pushed the government’s balance sheets deeper into red ink.

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