Factory Orders Climb 2.5 Percent

Quieting some of the recession talk, the government reported Friday that orders for costly, interest-sensitive goods staged a comeback last month after three straight declines.

Analysts said the surge in durable goods orders, led by demand for aircraft and business equipment, was consistent with a slowing economy, not a recession.

The Commerce Department said orders rose 2.5 percent in May, the first advance since January and the biggest in six months.

While the size of the increase caught analysts by surprise, they cautioned against exaggerating its significance.

“I think it’s encouraging evidence we’re looking at a slowdown in growth that will prove to be temporary,” said James Coons of Huntington National Bank in Columbus, Ohio. “We may have sub-par growth for a few quarters. But I don’t think the economy is going into a recession.”

Most recent data, particularly a drop in jobs and rising unemployment claims, have pointed to a severe slowdown. But analysts said to keep in mind that industries are still operating at high levels.