US factory orders fuel optimism

By Mark Gregory BBC business correspondent

US factory orders are rising again

The American economy, the world's largest, may be entering a period of growth.

At least that is what many analysts have concluded from the 1.7% rise in factory orders during June.

They see the rise as the latest in series of indicators suggesting that the future looks brighter now than it has done for quite some time.

Confusion

It is a remarkable change from just a few months ago when, in the run up to the war in Iraq, the American economy seemed in danger of slipping into recession.

At the time, economists could not agree among themselves on what was going wrong.

Some said the slowdown was a purely temporary response to the threat of a much higher oil prices and other uncertainties linked to the conflict.

Others were more pessimistic, saying the US was suffering from deep seated economic problems at home, and the fog of war was merely the trigger not the cause of slowing growth.

Conclusion

Recent economic data seems to suggest that the optimists may have been right, and that now the worst of the uncertainty about Iraq is over, economic growth has returned.

The very latest figures, released by the US Commerce Department, show an unexpectedly large jump in factory orders last month across a broad range of industries.

In a similar vein, last week there were figures showing faster than anticipated growth across all parts of the American economy in the three months to June.

But not all the evidence points the same way.

Monthly statistics released on Friday showed a drop in the number of jobs in the US.

The American economy is growing again but so far that has not persuaded firms to hire more staff.