The Week Aheadby
DURABLE GOODS ORDERS
New orders placed with durable goods manufacturers were probably unchanged in March from February, according to economists polled by MMS International, a division of McGraw-Hill Inc. The weakness in orders is suggested by the decline in industrial output and the continued drop in factory jobs in March. Manufacturers seem to have little new demand to keep workers busy. Orders declined a steep 2% in January and a further 0.3% in February. They now stand more than 4% below year-ago levels. Unfilled durable-goods orders likely declined in March. The backlog was unchanged in both January and February and is just 1.4% above the pace of a year earlier.
Domestically made new cars remain a drag on economic growth. The selling rate in the middle 10 days of April is expected to hang around an annual rate of 6 million. In the early part of the month, sales hit a dismal 5.6 million pace. Despite a boost in optimism, consumers have not resumed spending, especially on big-ticket items.
INITIAL UNEMPLOYMENT CLAIMS
New filings for state jobless benefits likely stood at an annual rate of about 510,000 for the week ended Apr. 13. Claims have been running at a 500,000 pace since late February as more businesses lay off workers.
GROSS NATIONAL PRODUCT
The MMS economists expect that real GNP dropped at an annual rate of 2.6% in the first quarter, after the 1.6% fall in the fourth quarter. The decline may be greater because of the large falloff in consumer spending and a widening in the trade balance. A buildup in inventories may partially offset the weakness in other sectors. Economists also project that the GNP deflator increased at a 4.1% annual rate last quarter, after advancing by 2.8% in the fourth quarter.