WASHINGTON -- Alan Greenspan, the chairman of the Federal Reserve, said yesterday that the economy's slide was drawing to an end and that the central bank needed to be especially cautious before deciding to try to hasten recovery through another round of interest-rate cuts.
"The evidence suggests that the economy is still modestly moving lower, but moving at a reduced rate," Mr. Greenspan told the Senate Banking Committee.
"We do expect the bottom to occur within a reasonably short period ahead," he added. "Week by week, the daily numbers still indicate that there is a modest decline."
Mr. Greenspan's comments came shortly after the Commerce Department reported that new orders for manufactured durable goods tumbled 6.2 percent in March, a considerably worse decline than expected. It was the fourth decline in five months and the biggest since an 11.2 percent plunge in November.
The drop in orders for durables -- goods from bicycles to bombers that are expected to last at least three years -- was widespread. When military orders, a volatile category, are excluded, the decline was still a steep 5.4 percent.
The decline put orders for durable goods at their lowest point since August 1987.
Douglas P. Handler, manager of economic analysis at Dun & Bradstreet, called the figures "a horrible setback" to those who believe the economy has already begun to revive. "The magnitude of this drop-off is usually associated with the beginning of a recession rather than the end," he said.
At an annual rate of $110.3 billion, which is adjusted for seasonal variation but not for inflation, orders for durables stand $7.3 billion, or 6.2 percent, below the February pace.