Economic reports give mixed signals
Thursday, July 6th 2000, 12:00 am
By: News On 6
WASHINGTON â€“ New orders to American factories shot up 4.1 percent in May, the largest increase since the end of 1992. A big jump in demand for electronics and other electrical equipment led the way.
In another report Thursday, many of the nation's biggest retailers in June reported weaker-than-expected sales for the fourth consecutive month.
The two reports appeared to offer mixed signals about the economy.
The bigger-than-expected increase in May's factory orders tracked by the Commerce Department suggested that the economy may not be slowing as much as some economists previously thought.
But the retail sales report hinted at some slowing in consumer spending, resulting from the Federal Reserve's six interest-rate increases over the past year. Soaring gas prices and some unseasonably cool weather, however, were cited as the biggest factors in dampening Americans' desire to shop in June.
The Fed's rate increases are designed to make borrowing more expensive and cool demand for big-ticket items, a move aimed at slowing the economy and keeping inflation under control.
On Wall Street, the Dow Jones industrial average was down about 67 points in morning trading as investors worried that rising interest rates could hurt corporate profits.
In a third report, the Labor Department said new claims for unemployment benefits fell by a bigger-than-expected 12,000 last week to 296,000. Claims had shot up the previous two weeks.
Analysts consider claims below 300,000 an indication of a tight labor market, meaning employers are having trouble finding qualified workers to fill openings.