Manufacturing Strong, but Leading Index Up Just 0.2%
A series of government reports issued yesterday indicated the economy is now growing at a rate that may be slow enough to calm fears of accelerating inflation. The reports also showed no recession is on the horizon, analysts said.</br></br>In a report pointing to continued economic growth, the Commerce Department said U.S. manufacturers booked $218.7 billion in new orders in April, up 1.2 percent from March and a record amount for a single month. Shipments of manufactured goods did not rise, but the backlog of unfilled orders rose 1 percent, to $418.1 billion, underscoring an upward trend that started a year ago.</br></br>However, two other reports indicated that no inflationary boom lies ahead. The department said its index of leading indicators rose 0.2 percent in April for the second month in a row, while the value of new construction was virtually unchanged from its March level at $401.8 billion.</br></br>The March increase in the leading indicators originally was listed at 0.8 percent, but it was revised downward on the basis of more complete information. With the revision, the index now shows small declines for both the final quarter of 1987 and the first quarter of 1988.</br></br>The lack of growth in the index, which often has foreshadowed changes in the direction of the economy, suggests smaller economic gains ahead. That would be consistent with forecasts that the gross national product, after an adjustment for inflation, will rise about 2.5 percent this quarter and next. The economy grew 4.8 percent in the fourth quarter of last year and 3.9 percent last quarter.