October durable goods orders, new jobless claims drop

WASHINGTON - Orders to U.S. factories for big-ticket manufactured goods plunged in October by the largest amount in two years as manufacturing was battered by the overall economic weakness.

There was also a decline in the number of new jobless claims.

The Commerce Department says orders for durable goods dropped by 6.2 percent last month, more than double the 3 percent decline economists expected.

The report showed widespread declines throughout manufacturing led by decreases in autos and airplanes.

JOBLESS CLAIMS

New jobless claims fell more than expected last week from a 16-year high, the government said Wednesday, though they remain at elevated levels due to the slowing economy.

The Labor Department reported that initial requests for unemployment benefits fell to a seasonally adjusted 529,000 from the previous week's upwardly revised figure of 543,000. That is lower than analysts' expectations of 537,000.

Despite the improved number, initial claims remain at recessionary levels. The four-week average, which smooths out fluctuations, rose to 518,000, its highest level since January 1983, when the economy was emerging from a steep recession.

The number of people continuing to claim unemployment insurance also dropped unexpectedly to 3.96 million, down from the previous week's 4.02 million, which was the highest level in 25 years. The labor market has grown by about half since 1983.

Economists consider jobless claims a timely, if volatile, sign of how fast companies are laying off workers. Employees who quit or are fired for cause are not eligible for benefits.

The economy has been hit hard in recent months by the housing slump and the broader financial crisis, which have led consumers and businesses to cut back on spending.

Higher unemployment could lead to a downward spiral, as laid-off workers are more likely to fall behind on mortgage payments and other debt. Those who remain employed also may become more conservative in their spending.

Several companies announced layoffs in the past week, including Bank of New York Mellon Corp., Western Union Co. and the Dillards Inc. department store chain.