Factory Orders Rise at Fastest Pace in 7 Years

Orders for U.S. manufactured goods rose at their fastest monthly pace in seven years in December, topping a solid year of gains as the economy showed no imminent signs of a slowdown, new Commerce Department figures show. Factory orders rose 3.3% in December--the largest gain since a 4.9% rise in December 1992--to a seasonally adjusted $377.76 billion. The gains were driven by strong demand for durable goods, particularly transportation and electrical equipment. Orders for nondurable goods rose 0.5%. Excluding transportation, orders rose 1%. Factory orders for the year totaled $4.28 trillion, up 6% from 1998 and making for the largest gain since a 7.5% rise in 1995. The strong performance for the year offers the latest sign that manufacturing has rebounded from a slump in 1997 and 1998 that was related to the Asian financial crisis.

In a separate report, the Labor Department said initial claims for state unemployment compensation fell by 5,000 to 274,000 for the week ended Jan. 29, from a revised 279,000 for the previous week, indicating further tightening in the labor market.

Retailers reported better-than-expected sales for January, despite winter storms that hit much of the eastern U.S. Leading the gains was Wal-Mart Stores Inc., with a 4.1% rise in sales at stores open at least a year. Same-store sales for retailers grew 5.4% from a year earlier, beating forecasts for a 4% gain, according to Bank of Tokyo-Mitsubishi Ltd., which analyzed the results of 67 retailers.