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Fattest Paychecks In 9 Years

Orders to American factories shot up by 5.5 percent in June, the biggest increase in nine years, as the U.S. economy continued to confound expectations of a slowdown.

The Commerce Department said that the big jump in factory orders was propelled by a record 175.2 percent surge in orders for commercial aircraft and other aerospace equipment.

Orders for non-durable goods actually dropped 0.1 percent in June, following a 1.6 percent increase in May, with demand for chemicals, paper and tobacco products showing the largest decreases.

Durable goods, items expected to last three or more years, were up 9.7 percent, slightly revised from an advanced report last week that had put the gain at 10 percent. But it was still the biggest increase in durable goods orders in nine years.

In another report, the Labor Department said Thursday that the number of Americans filing new claims for unemployment benefits edged up a slight 2,000 last week to 276,000, still a level indicating extremely tight labor markets.

The government on Friday will release its report on unemployment for July. Economists were expecting the jobless rate to hold steady at 4 percent as the booming U.S. economy keeps unemployment at the lowest levels in three decades.

The report on factory orders showed the increase was led by a record 42.2 percent jump in demand for transportation equipment, which climbed to $68.8 billion. The strength was centered in a record 175.2 percent increase in orders for commercial aircraft and other aerospace equipment.

The Federal Reserve has raised interest rates six times over the past 14 months in an effort to slow the super-charged U.S. economy down to a more moderate pace of growth and keep inflation under control.

The Fed next meets on Aug. 22 and until recently, Wall Street investors were growing more confident that the central bank would leave rates unchanged at that meeting, believing they have done enough for now to slow growth.

However, last week, the Commerce Department reported that the gross domestic product, the country's total output of goods and services, did not slow down as everyone had expected in the April to June quarter but instead accelerated to a growth rate of 5.2 percent.

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