Big-ticket orders hint at economic recovery

WASHINGTON – Orders to U.S. factories for big-ticket manufactured goods rose a solid 1.9 percent last month, the best showing since November. Sales of new homes hit an all-time high.

Reports from the Commerce Department provided further evidence that the economy has recovered from its March slowdown.

The department said the increase for durable goods was propelled by strong demand for transportation equipment, especially airplanes, which helped push the overall number up by $3.71 billion to a seasonally adjusted $200.3 billion. Excluding transportation, orders would have edged down a slight 0.2 percent.

In a second report, the Commerce Department said sales of new homes, which were already at a record level in March, inched even higher in April, rising 0.2 percent to a new record annual rate of 1.316 million units. The median price of a new home jumped 6.1 percent to a new all-time high of $230,800.

Economists said the strength in both reports showed that worries of a serious slowdown from this year’s oil shock were overblown.

“In March we had a combination of bad weather and bad seasonal adjustment problems which made that month look too weak,” said David Wyss, chief economist at Standard & Poor’s in New York.

He said based on the data so far, economic growth for the first three months of the year will probably be revised up in a government report Thursday to around 3.5 percent, compared with the originally reported 3.1 percent growth. Wyss said based on the strength already seen in April, he will increase his estimate for second quarter growth as well.

“It looks like we will get around 3.5 percent growth for the first half of this year, which is pretty darn good,” he said.

The strong report on new home sales followed a report Tuesday showing that sales of existing homes shot up 4.5 percent in April to an all-time high annual rate of 7.18 million units.