The Economy: Rise in Durable-Goods Orders Offers Hope for Manufacturing
Dow Jones Newswires</br></br>WASHINGTON -- There are signs that the long downward spiral of the U.S. manufacturing sector may have hit bottom.</br></br>The Commerce Department reported Friday that orders for durable goods, items meant to last three years or longer, rose a stronger- than-expected 2.1% in June, the largest gain in nearly a year. Shipments rose 1.3% in June and unfilled orders increased 0.1%. Orders for May, meanwhile, were revised upward to unchanged from a previously estimated decline of 0.4%.</br></br>While the improvement in orders is hardly enough to signal that manufacturing is out of the woods, it may suggest that the long- suffering industry could be poised for better times ahead. "I think manufacturing has turned the corner," said Ken Mayland, economist at ClearView Economics in Cleveland. Economists had expected durable- goods orders to show strong growth in June based on improvement in several regional manufacturing surveys. However, the size of the June gain was larger than most had anticipated.</br></br>David Rosenberg, chief North American economist at Merrill Lynch & Co., said the durable-goods report, when combined with other recent positive economic news, means that economic growth in the third quarter will show an improvement compared with the anemic second quarter. "The third quarter is looking good," he said. "Not great, but good."