Factory Orders soar in June

Friday, August 4th 2000, 12:00 am
By: News On 6

WASHINGTON – Orders to American factories surged by the largest amount in nine years, but the nation's biggest retailers reported lackluster sales in an economy sending mixed signals Thursday about whether the slowdown is really here.

The Commerce Department said factory orders jumped 5.5 percent in June, the biggest advance since July 1991, led by a record 42.2 percent increase in orders for aircraft and other transportation products.

The orders report showed that demand for nondurable products actually fell in July by a slight 0.1 percent as orders dropped for chemicals, paper and tobacco products.

However, orders for durable goods, items expected to last three or more years, jumped by 9.7 percent, a downward revision from an advance report last week but still the biggest gain since July 1991.

Strength was centered in transportation and a record 175.2 percent jump in the volatile aircraft sector.

But analysts noted that demand for nondefense capital goods shot up 16.5 percent in June, reflecting the boom in capital investment that was highlighted in the spring gross domestic product report.

June shipments of goods from the nation's factories rose 1 percent, while inventories increased 0.5 percent.

The inventories-to-shipments ratio fell to a record-low 1.25 months in June from 1.26 months in May.