Factory Orders Rise 0.5 Percent

Orders to U.S. factories rose 0.5 percent in January, evidence the financial crisis in Asia has yet to hit the economy hard. But economists said the warning signs are there.

“There has been some cooling off,” said NationsBank economist Lynn Reaser. “I think we’ll see more of the effect of Asia in the second quarter.”

The Commerce Department reported Thursday that the January advance in factory orders did not compensate for a revised 2.6 percent drop in December, the worst showing for American manufacturers in more than five years.

Nearly all of January’s strength came from a 71.9 percent rebound in orders for aircraft. Outside of transportation, demand for U.S. manufactured goods was extremely weak, dropping by 0.2 percent.

Most economists believe that a recent plunge in currency values in many Asian countries means U.S. factories eventually will have to cut production and workers.