New orders for durable goods probably rose at U.S. factories last month, while consumers plunked down more money for homes and autos, bolstering expectations that economic growth accelerated this quarter, economists said in advance of reports this week. A report Wednesday from the Commerce Department will show that bookings for machinery, electronic goods and other products made to last three or more years increased 1.5 percent in February, according to the median forecast in a Bloomberg News survey. The report is also expected to show that orders excluding transportation equipment gained 1 percent.
``Business is great,'' George David, chief executive of United Technologies Corp., the maker of Carrier air conditioners and Otis elevators, said during the company's annual meeting Thursday. ``You can hear the cash go by the door.'' Personal spending, which accounts for more than two-thirds of the economy, may have gotten a boost last month from refunds engendered by President George W. Bush's tax cuts in 2003. Wal- Mart Stores Inc. is among retailers whose sales continued to improve this month, suggesting consumer purchases will hasten the speed of economic growth this quarter, which ends March 31. ``The recovery is gaining momentum again,'' said Scott Anderson, a senior economist at Wells Fargo & Co. in Minneapolis. ``We are seeing very good demand from every part of the economy.''
Steady Increases
A February increase in orders for durable goods would be the fourth in sixth months. An increase for durables excluding transportation equipment would be the ninth in 10th months. United Technologies, based in Hartford, Connecticut, earlier this month raised its revenue forecast by $1 billion to $34 billion for 2004. Commercial sales for Carrier, the world's largest maker of air conditioners, are rising in the U.S. and Europe. Otis, the world's biggest maker of elevators, has targeted growing demand in China, United Technologies said at its annual meeting. The improvement in sales may not translate into many more U.S. jobs. Otis is moving some parts production to China to be closer to its customers and reduce costs, the company said. Concerns about the economy and jobs have become the most important issues for voters in this year's presidential election, recent polls show. Democratic presidential candidate John Kerry, a senator from Massachusetts, says the administration has done too little to spur employment. He cites the 2.3 million jobs lost during Bush's presidency. Tax refund checks may have helped Americans keep buying as job fears mount. Personal spending probably rose 0.5 percent last month, the fourth consecutive increase, after rising 0.4 percent in January, according to the median forecast for Friday's report from the Commerce Department.
Income Growth
Incomes probably rose 0.3 percent last month, compared with a 0.2 percent increase in January, as more refunds reached taxpayers, the Commerce report is also likely to show. Auto dealers and department stores benefited from rising incomes last month, when retail sales rose 0.6 percent, a report March 11 from the Commerce Department showed. Sales at automobile dealerships and parts stores rose 2.7 percent, the biggest gain since March 2003. Receipts at department stores improved 1.2 percent, the most since July. Wal-Mart, the world's largest retailer, said last week that sales this month are rising near the high end of its 4 percent to 6 percent forecast. The Bentonville, Arkansas, company said more shoppers cane to stores and spent a higher amount each visit compared with a year earlier. Target Corp., the second-largest discount chain in the U.S. after Wal-Mart, said March sales have been higher than it expected. Refunds may be about $25 billion greater this year than last, according to estimates from Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut. Gross Domestic Product
The Commerce Department's final estimate of gross domestic product for the fourth quarter of 2003 is expected to confirm that the economy grew at a 4.1 percent annual pace, unchanged from last month's preliminary estimate. That report is Thursday. Rising consumer and business spending will help the economy expand 4.5 percent at an annual rate this quarter, a separate Bloomberg News survey of economists showed earlier this month. Consumer spending probably has risen at a 3.5 percent annual pace from January through March, compared with a 2.7 percent increase in the previous three months, according to the median forecast. A report Wednesday from the Commerce Department may show that 1.1 million new homes were sold in February at an annual pace, close to January's rate and near the record 1.2 million in June. Sales of previously owned homes probably rose to 6.15 million houses at an annual rate in February from 6.04 million a month earlier, the National Association of Realtors is expected to report Thursday. A record 6.1 million homes were resold in 2003.
The University of Michigan's sentiment index fell to 93.5 this month from 94.4 in February, a report Friday may show. The preliminary reading earlier this month was 94.1. A report Thursday from the Labor Department is expected to show that 340,000 Americans filed initial applications for unemployment insurance benefits in the week that ended Saturday. The figure dropped to 336,000 a week earlier, the fewest in three years. ///www.bloomberg.com