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February factory orders for durable goods up 0.3%

In other reports released Thursday, jobless claim filings and new home sales rise.

Associated Press
Published March 25, 2005

WASHINGTON - America's factories saw orders for big-ticket goods rise by 0.3 percent in February after falling sharply the month before. The report highlighted the sometimes uneven recovery experienced by manufacturers.

The increase in February pushed up the total value of new bookings for durable goods - costly manufactured products expected to last at least three years - to $200.8-billion. The rise in orders came after a 1.1 percent drop in January, the Commerce Department reported Thursday.

While most of January's decline reflected weakness in demand for commercial airplanes, most of February's pickup came from a big bounce-back in new orders for commercial aircraft and parts. Demand for other types of manufactured goods last month was somewhat sluggish.

Excluding orders for transportation equipment, which can swing widely from month to month, durable-goods orders dipped by 0.2 percent in February, the first decline since November.

On Wall Street, the Dow Jones industrials lost 13.15 points to close at 10,442.87.

In other economic news, the number of new people signing up for unemployment benefits last week rose by a seasonally adjusted 3,000 to 324,000 the Labor Department reported. Even with the rise, claims are at a level that suggests a gradual improvement in the jobs market.

Meanwhile, new-home sales in February soared by 9.4 percent - the biggest increase since December 2000 - as still-attractive mortgage rates lured buyers, the Commerce Department said in a separate report.

The over-the-month increase boosted sales of new homes to a seasonally adjusted annual rate of 1.2-million. Sales posted solid gains in all parts of the country in February. The pickup comes after sales dropped by 8.6 percent in January as bad weather kept house hunters and prospective buyers indoors.

Home sales, which posted record highs last year, are expected to slow this year as mortgage rates move higher. Still, analysts believe the housing market should remain in good shape.

The median sales price of a new home - where half sell for more and half sell for less - rose to a record high of $230,700 in February.

In the manufacturing report, the 0.3 percent rise in orders for big-ticket goods in February was weaker than some analysts were expecting. They were forecasting a 0.8 percent increase.

Some economists thought lackluster demand for certain goods may partly reflect the expiration in 2004 of a temporary provision that had allowed companies generous write-offs on capital equipment.

"Perhaps we are witnessing the breather after a tax-incentive induced flurry late last year," said Steve Stanley, chief economist at RBS Greenwich Capital.

[Last modified March 25, 2005, 01:00:17]

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