updated 5/3/2005 11:49:43 AM ET 2005-05-03T15:49:43

Orders to U.S. factories eked out a tiny 0.1 percent increase in March even though demand for big-ticket items took a big plunge, the Commerce Department reported Tuesday.

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The small gain pushed total factory orders to $378.2 billion in March and followed a 0.5 percent decline in February. The tiny increase was still better than economists had been expecting. They were looking for a big drop of around 1.2 percent, based on a preliminary report last week that showed a huge plunge in orders for durable goods, which make up a little more than half of total factory orders.

Some of the weakness in durable goods orders was revised away, however, to show a March decline of 2.3 percent instead of the initially reported 2.8 percent drop. It was still the biggest decline in this category in 11 months. A variety of economic reports has shown that the economy slowed significantly during March as a big jump in energy prices jolted consumer and business confidence.

Analysts believe the current "soft patch," the term Federal Reserve Chairman Alan Greenspan used to describe a similar slowdown last year, will be only temporary. But they caution that something unexpected such as further sharp increases in energy prices could make that forecast too optimistic.

The government reported last week that the overall economy grew at an annual rate of just 3.1 percent in the January-March quarter, the slowest increase in two years.

The small 0.1 percent increase in total factory orders reflected a 2.3 percent drop in durable goods orders, which fell to $195.1 billion, and a 2.8 percent increase in orders for nondurable goods, items not expected to last at least three years. Orders for nondurable goods rose to $183.1 billion after a 1 percent drop in February.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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