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WASHINGTON — Factory orders climbed an unexpectedly strong 1.8% in August as domestic oil refiners benefited from Iraq’s invasion of Kuwait, the Commerce Department said Wednesday.
Analysts said the strength of August’s orders did not reflect a fundamental gain but was a temporary boost due to sharply higher oil prices.
Baghdad’s Aug. 2 takeover of Kuwait and the subsequent threat to Saudi Arabia’s oil fields boosted the U.S. petroleum refining industry, the department said.
“To me, the number excluding petroleum is consistent with our view that the economy is sliding and slipping into a recession,” said Sung Won Sohn, chief economist with Norwest Corp. in
Minneapolis.
The surprise gain pushed orders to a seasonally adjusted $244.6 billion. Excluding petroleum, orders rose just 0.6% in August.
Other important industries, including those in the key durable goods sector, reported weaker orders in August than the month before. Analysts said those figures more accurately reflected the
generally weak state of economic activity.
Shipments of petroleum and coal products rose by about $3 billion during August from July levels, department officials said. Transportation equipment orders rose by 1.8% in August after
gaining 4.6% in July.