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Autos, Aircraft Power U.S. Factory Orders

Economy: August's 0.9% rise is due entirely to transportation sectors. Another report shows consumer optimism fading slightly in September.

October 03, 1998|From Times Wire Services

WASHINGTON — Orders to American factories rose 0.9% in August, reflecting a rebound in auto manufacturing following the General Motors strike and a surge in demand for aircraft.

Orders totaled a seasonally adjusted $337.7 billion, the Commerce Department said Friday.

Demand for automotive equipment surged 9.9% and aircraft orders soared 27.2%. However, excluding transportation, orders fell 1.2%, the worst showing in three months.

Another report Friday showed that consumers were a little less upbeat about their finances and economic prospects in September than they were in August.

The University of Michigan's final index of consumer sentiment for September fell to 100.9 from 104.4 in August, people with access to the study said. A preliminary estimate at mid-month put sentiment at 100.4.

The index is determined from a baseline of 100 set in 1966. Gains and losses in the index indicate Americans' degree of comfort with their finances and the state of the economy.

The final index of current economic conditions fell to 111.7 from 113.9 in August. The preliminary reading was also 111.7.

Future economic growth expectations also fell in September, the survey found. The university's final index of expectations fell to 93.9 from 98.3 in August. The preliminary reading was 93.2.

The Commerce Department report showed that in August, orders for durable goods--big-ticket items expected to last three or more years--rose 1.7%, largely because of transportation. Orders for most other types of goods fell. Even the stalwart computer industry suffered a 0.4% drop.

Orders for nondurable goods slipped 0.2%, reflecting declines in petroleum and coal products, printing and publishing, and chemicals.

Orders are an important leading indicator of how busy factories will be in the months ahead. Shipments, a barometer of current production, increased 0.4% in August.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Factory Orders

New orders, in millions of dollars, seasonally adjusted.

August: $337.7

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