Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, February 6, 1991 TAG: 9102060054
SECTION: BUSINESS PAGE: B5 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Some analysts said it was an indication the recession may not be as mild as predicted.
"The economy very clearly is in trouble," said Robert Brusca, an economist with Nikko Securities Co. International in New York. "This is going to be a very typical-to-severe recession."
Economist Elliott Platt of Donaldson, Lufkin & Jenrette, a New York securities dealer, agreed that it "may be more severe than we originally thought," in light of recent data, including a huge loss of jobs in January.
The Commerce Department reported that orders for durable and non-durable goods totaled $235.6 billion in December. For the year, orders edged up to $2.9 trillion, the smallest gain since 1986 when orders fell 1.2 percent.
The report also said orders plunged a revised 5.8 percent in November, the largest drop since a 7 percent decline in December 1974. The November figure had been estimated at 5.9 percent.
Commerce said orders for durable goods - usually expensive items expected to last more than three years - advanced 3.4 percent to $120.3 billion, even slower than the 4.4 percent gain first reported last week. But that failed to make up for a 10.1 percent drop a month earlier.
The report said the increase was concentrated in military and commercial aircraft orders and, if those categories were excluded, orders actually fell 4.7 percent in December.
The overall durable-goods increase was offset by an identical 3.4 percent decline in non-durable goods, to $115.3 billion. The decline, for the second consecutive month, reflected "erratic movements in the petroleum, chemicals and tobacco industries," Commerce said.
In the durable category, the transportation sector posted a 13.6 percent gain, to $32 billion, after falling 25.3 percent in November. Military orders and commercial aircraft bookings more than offset a large decline in motor vehicle orders. But excluding transportation, orders fell 1.9 percent.
Defense orders were up 59.8 percent, to $8.4 billion. Analysts attributed it to the military buildup in the Persian Gulf. Excluding defense, factory orders fell 1.4 percent. Defense orders had fallen 26.9 percent in November.
Shipments of manufactured goods fell 3.4 percent to $232.6 billion while unfilled orders, an indication of how busy factories will be in coming months, edged up 0.6 percent to $520.2 billion.
Inventories dipped 0.8 percent to $375.1 billion, the largest one-month decline since a 0.8 percent drop in January 1986.
by CNB