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Archive for Friday, July 26, 2002

Demand for big-ticket goods plunges in June

July 26, 2002

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— Orders to U.S. factories for big-ticket goods, including cars and computers, fell in June by the largest amount in seven months, raising fears that the stock market doldrums may be causing Americans to rein in spending and slow the recovery.

Economists were rattled by a Commerce Department report Thursday showing orders for costly manufactured "durable" goods dropped by 3.8 percent in June from the previous month. Many economists were predicting an increase in bookings. The weakness was widespread.

The decline in orders along with a 1.4 percent drop in shipments a good barometer of current demand was viewed by economists as an ominous sign that businesses, battered by the sour stock market, may be growing even more uncertain about the economy's recovery.

"I think it is becoming clear that the recovery in the second half is going to be very disappointing," said Mark Zandi, chief economist for Economy.com.

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