New orders for manufactured goods rose a sharp 5.7 percent in July, the first increase since January and the largest in nearly 10 years, the Commerce Department reported yesterday.
Orders received by durable goods manufacturers jumped 10.3 percent to $73.3 billion instead of the 8.4 percent reported earlier on the basis of preliminary information.
The increases provided more solid evidence the nation's economic decline has slowed. At the moment, forecasters are divided over how much further the economy will contract, if at all, before turning upward again.
Commerce also gave some less rosy news in a separate announcement. The value of new construction put in place in July was running at a seasonally adjusted annual rate of $214.3 billion, slightly below June's $216.3 billion rate and well below the $237.5 billion rate for the three months ended last April.
July's surge of new orders was led by a $3.5 billion jump in transportation equipment, but the increases were widespread. All major industry categories showed some increase over June except for electrical equipment, the department said.
The faster pace of orders -- which in the auto industry is essentially the equivalent of sales -- already has resulted in some workers being recalled from layoffs in several industries, including autos and steel.
Steel producers reported the second consecutive large increase in orders in July. After plummeting 12.4 percent in March, 20.1 percent in April and 18.6 percent in May, new orders for steel rose 16.1 percent in June and another 22.5 percent in July, the department said.
In the key area of nondefense capital goods, new orders rose nearly $900 million to $20.8 billion in July.
Not counting transportation, the increases in orders were not as large as the value of the shipments of finished goods, so order backlogs declined. But the increase in transportation orders was large enough to boost the overall value of unfilled orders by nearly $1 billion to $282 billion.
Shipments rose in July by $3.9 billion, or 2.7 percent, to $145.4 billion following four consecutive monthly declines
The book value of manufacturers' inventories in July rose $900 million, or 0.4 percent, to $244.5 billion. That rise followed four monthly increases at the beginning of the year that averaged more than 1.5 percent.
During the first seven months of this year, $126.4 billion worth of new construction was put in place compared with $122.1 billion for the same months of 1979.
However, after adjustment for inflation, a different picture emerges: In real terms, the July rate was 2 percent lower than the June rate and 16 percent below July 1979, the department said. On this basis, the value of residential construction was down 29 percent from July 1979, and nonresidential construction was down 10 percent.