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Road to recovery

  • Factory output gives hint of faster growth
    U.S. factories boosted output last month, and December ended up being their best month of growth in five years.
  • January retail sales pick up
    Americans rebounded from a weak holiday season and stepped up spending on retail goods in January. The latest government report on retail sales pointed to a slowly improving economy. Retail sales rose at a seasonally adjusted 0.
  • Jobs lost; hopes fade
    J.R. Childress is up before the sun, bustling about in the French colonial brick house he built.
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Associated Press
Orders to U.S. factories for big-ticket manufactured goods fell broadly in June as the fragile recovery continued to slow.

June durable-goods orders fall 1%

– Orders to U.S. factories for big-ticket manufactured goods fell in June as demand for commercial aircraft plummeted. But businesses increased spending on capital goods for a second straight month, a sign that manufacturing continues to help keep the economic recovery afloat.

Demand for durable goods dropped 1 percent last month to a seasonally adjusted $190.5 billion, the Commerce Department said Wednesday. It was the second straight monthly decline and the largest drop since August 2009.

Orders for commercial aircraft fell 25.6 percent in June, although seasonal adjustments kept the report from reflecting a strong month for Boeing. Without the volatile transportation sector, orders fell by 0.6 percent.

Manufacturing has helped drive growth during the early stages of the recovery. A slowdown in orders could mean the recovery is losing strength.

Still, economists said the June report wasn’t as bad as the headline number. Business spending for equipment edged up 0.6 percent, after a 4.6 percent surge in May. And positive earnings reports could lead to further gains in net income, an encouraging sign for the rest of the year.

“Overall, we have no doubt this data will play badly in the markets, but it isn’t actually that terrible,” said Paul Ashworth, a senior U.S. economist with Capital Economics. “The bottom line is that it shows business investment had a very strong second quarter and, although the recovery in manufacturing may be losing a little momentum, it is hardly collapsing.”

June’s overall durable goods orders were 16.5 percent higher than the seasonally adjusted $176 billion in orders from a year ago, when the economic recovery had yet to take hold. But they were below the pre-recession peak of $229.5 billion in July 2007.