WASHINGTON - Orders for big-ticket durable goods slipped unexpectedly in November for the first time in three months as demand for electronic equipment such as circuit boards and communications gear waned.
But analysts said despite the drop in the often-volatile orders report, the economy is growing moderately.
"1997 will be another good year for manufacturing," contended economist Mark Zandi of Regional Financial Associates in West Chester, Pa.
Carl Palash, an economist at MCM MoneyWatch in New York, agreed, saying if the volatility is stripped away, the report "shows demand is on an uptrend but at a moderate pace."
Orders for durable goods fell 1.6 percent to a seasonally adjusted $171.8 billion, the Commerce Department reported Friday. It was the first decline since a 3.6 percent drop in August. Many analysts had expected a 0.5 percent gain.
But the report also showed orders grew 0.5 percent in October, stronger than the department's anemic 0.1 percent estimate a month ago.
Durable goods orders are a key gauge of the nation's manufacturing sector. For the year so far, they are 6 percent higher than during the same period a year ago.
The drop in November was due largely to a 9.3 percent plunge in orders for electronic and other electrical equipment, which had shot up 16.9 percent a month earlier.
"November was just a pull back from an extraordinarily high level," Mr. Zandi said.
And economist Sung Won Sohn of the Norwest Corp. in Minneapolis said there are signs that orders for such items as semiconductors and telephone equipment already have started to rebound.
The drop was welcomed by financial markets because it suggested the economy is not growing at an inflationary pace and that the Federal Reserve is less likely to raise interest rates to curb inflation.
By early afternoon, the Dow Jones industrial average had moved into record territory. Bond prices also were higher.
Meanwhile, the Labor Department reported that new claims for jobless benefits fell by 15,000 last week to 335,000. Many analysts had expected a smaller 5,000 decline from the previous week's 350,000 level, highest since last July.
The less-volatile, four-week moving average of new weekly claims dropped to 341,250 from 342,250 the previous week.
"The report is consistent with moderate but healthy growth" in the labor market, Sohn said.
Transportation orders were unchanged in November as demand for automobiles and other items were offset by a 34 percent decline for aircraft.
Excluding transportation, orders were off 2.2 percent, also the first drop since August and the largest decline since a 2.4 percent decrease in January 1993.
But orders for industrial machinery and equipment including computers and household appliances posted a 0.3 percent gain, the first advance since July, while bookings for primary metals rose 0.2 percent, also the first increase since July.
Orders for nonmilitary capital goods excluding aircraft fell 1.6 percent, erasing an identical 1.6 percent gain in October.
These orders often are a barometer of business plans to expand and modernize and have been a major source of economic strength during the current expansion.
The volatile military category shot up 55.2 percent, compared with a 2 percent advance the previous month. Excluding military goods, orders were off 3.4 percent.
Unfilled orders edged up 0.3 percent, the sixth increase in the last seven months. A growing backlog suggests businesses could find it necessary to increase production facilities and manpower to meet demand.
Shipments, a measure of current activity, rose 0.8 percent, the fourth increase in five months.