Orders for manufactured goods fell in May for a third straight month, while the nation’s growth rate in the latest measure was even slower than was first believed, the Commerce Department said Wednesday.
The separate reports on factory orders for durable goods and gross domestic product came amid other signs that the economy has added little vigor in the second quarter.
The department said orders for durable goods-items meant to last three years or more-weakened in May by 1.6 percent following declines of 0.2 percent in April and 3.4 percent in March.
Economists had been expecting an increase.
“We’re not exactly seeing a resurgence in demand for manufactured goods,” said Peter Greenbaum, economist at Smith Barney, Harris Upham & Co.
“The order book is melting in the summer heat,” he said. “We’re going in the wrong direction. You want to see the order book building, as a base to increase future production.”
First-quarter GDP expanded by only 0.7 percent at an annual rate, down sharply from 4.7 percent in the fourth quarter of 1992, the department said in a final estimate of output of goods and services.
It was the weakest performance since the fourth quarter of 1991, when GDP grew at a 0.6 percent rate.
“Clearly we’re disappointed when growth is less than we would like it to be,” Commerce Secretary Ron Brown told reporters.
John Albertine, a Washington economic consultant, said weakness appeared to be spreading through the economy just when the Clinton administration is advocating higher taxes. There also are worries that the Federal Reserve Board will impose higher interest rates to control inflation.
“Consumers are not spending, retailers are not selling, and new orders are not being placed with manufacturers,” Albertine noted.
“The administration, the Congress and the Federal Reserve appear determined to turn anemic growth in the second quarter into full-fledged recession by year’s end.”
The GDP report showed the rate of inflation, measured by its fixed-weight index, picked up to 4.3 percent from 3.4 percent in the fourth quarter.
But private analysts said it seemed unlikely prices would take off when incomes and growth are so slow.
