WASHINGTON -- The industrial sector kept on humming in June as new orders for durable goods surged 1.3%, the Commerce Department reported yesterday.

The increase was larger than expected and marked the fourth straight rise in monthly orders after a revised gain of 1.2% in May. Economists were impressed by the report, which showed widespread gains in autos as well as electronic goods and industrial machinery.

"I thought it was more than solid. I thought it was strong," said Robert Dederick, chief economist for Northern Trust Co., in Chicago. "As far as manufacturing is concerned, this talk of a slowdown is a false rumor."

There was some talk among analysts that the industrial sector was cooling after the Federal Reserve reported that most of the rise in June industrial production resulted from increased use of electricity. Excluding electricity, U.S. output rose only 0.1% last month.

Dederick said that although business inventories have built up while consumers retrenched in the spring, businesses still appear to be spending heavily for goods. He noted that orders for non-defense capital goods jumped 6.2% after falling in April and May.

"This is going to give fuel to those who are worried about excessive strength in the economy," said Dederick. "If you're a bond market type, this has to make you uneasy."

The Commerce Department is scheduled to release its advance estimate for gross domestic product in the second quarter on Friday, and many economists expect the report to show the economy continued to expand rapidly. As a result, there is widespread-anticipation that Fed officials will lift short-term rates again at the Aug. 16 meeting of the Federal Open Market Committee unless the July employment report turns out to be weak.

Continental Bank is carrying a forecast of 4% GDP growth in the second quarter said Joan Schneider, the bank's senior domestic economist.

The durable goods report showed that untilled orders in June rose slightly for the third straight month despite a healthy jump.of 1.1% in shipments. Order backlogs are not rising dramatically, but the buildup is contributing to a slowdown in the pace of vendor deliveries, said Brian Wesbury, chief economist for Griffin, Kubik, Stephens & Thompson Inc., in Chicago.

Fed chairman Alan Greenspan is known to pay close attention to activity in the manufacturing sector for signs of possible price pressures. In his testimony to Congress last week, Greenspan said, "indeXes of vendor-performance have deteriorated considerably, and manufacturers are paying higher prices for materials used in their production processes."

Orders for transportation products, which includes autos and defense-related goods, jumped 2.3% in June. But orders elsewhere were also strong, the Commerce figures showed. Orders for industrial machinery and equipment rose 2.2%, and orders for electronic goods advanced 1.1%. Excluding defense, orders were up 1.3% after a gain of 1.2% in May.

Still, not all analysts said the figures supported the notion that the economy is overheating. Sandra Shaber, senior vice president for the WEFA Group, said some of the increase in orders was going overseas as exports and to help businesses boost productivity by upgrading plant and equipment.

Shaber said she expects to see GDP growth of around 3% in the second quarter, below the estimate of most analysts. "This kind of durable goods report, in my view does not point to any inflationary fires," she said.

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