ROANOKE TIMES 
                      Copyright (c) 1996, Roanoke Times

DATE: Friday, February 16, 1996              TAG: 9602160093
SECTION: BUSINESS                 PAGE: B-7  EDITION: METRO 
DATELINE: WASHINGTON
SOURCE: Associated Press 

DEC. GAIN ENDS '95 ON HIGHER NOTE - MAYBE REPORT SHOWS ECONOMY NOT SLIDING INTO RECESSION; SOME DISPUTE FIGURES

New orders to American factories jumped 1.3 percent in December, led by strong demand for aircraft and automobiles.

But analysts cautioned against reading too much into the report since it was only the fifth advance in 12 months. Some noted a much more recent report showing a big jump in unemployment claims in early February.

``The numbers indicate the economy ended 1995 on stronger note than many had assumed,'' said Lynn Reaser, an economist at First Interstate Bancorp in Los Angeles. ``They indicate the economy is not sliding into recession as a few had started to fear.''

Despite the December increase in factory orders, Reaser said the Commerce Department report Thursday conflicted with other data on the manufacturing economy's performance in the final three months of 1995.

Factory orders for both durable and nondurable goods totaled a seasonally adjusted $308.1 billion, up from $304.1 billion in November when billings slipped 0.1 percent, the Commerce Department said.

But the December increase was only the fifth of the year. Orders for all of 1995 rose just 6.6 percent, compared with a 10.3 percent jump in 1994.

Much of December's gain was attributed to a 6.3 percent advance in transportation orders, led by aircraft and autos. Orders for electronic and other electrical equipment rose 6.7 percent.

But orders for industrial machinery and equipment were off 2.2 percent. Orders for primary metals were down 1.4 percent.

The backlog of unfilled factory orders rose 0.3 percent. It was the fourth straight advance, suggesting increased employment and longer production lines may be needed to meet demand.

Inventories, another sign of future activity, rose a slight 0.1 percent, resulting in a 1.36 inventories-to-shipments ratio. That meant it would take 1.36 months to exhaust stockpiles at the December shipment pace rate.

In other reports Thursday:

The Labor Department said the number of first-time claims for jobless benefits shot up by 21,000 last week, to a seasonally adjusted 387,000, reversing a two-week decline following the January blizzard.

The number of new claims had jumped by 96,000 - to 412,000 - during the week ended Jan. 20, which analysts attributed to filings that had been delayed when the winter snowstorm closed many unemployment offices.

The National Association of Manufacturers released a survey of its directors Thursday showing 92 percent predicting the economy would escape a recession this year. But a consensus projected the economy would grow a meager 2.1 percent, compared with 3.5 percent in 1994.

LENGTH: Medium:   58 lines
ILLUSTRATION: GRAPHIC:  Chart by AP.