US durable goods orders fall but job market heals
Orders for long-lasting US manufactured goods fell in February as companies scaled back investment plans for a second month in a row.
Separate data has shown the labour market recovery becoming more entrenched, with new claims for jobless benefits falling last week and the four-week moving average dropping to it lowest level in more than two-and-a-half years.
Economists cautioned against placing too much weight on the weak manufacturing report, saying the data was in stark contrast to other upbeat surveys on factory activity.
“Industrial production of business equipment continues to rise and the industrial surveys continue to look great, including for surveys of (capital) spending plans,” wrote economists at Goldman Sachs in New York, who noted the data series was particularly volatile.
Non-defence capital goods orders excluding aircraft, a closely watched proxy for business spending, fell 1.3 per cent in February after a six per cent drop the prior month, the Commerce Department said.
Economists had expected the business spending gauge to rise 4.5 per cent last month.
The weakness in business demand and a big drop in defense aircraft orders helped pull down overall orders for so-called durable goods, items meant to last three years or more, by 0.9 per cent. They had risen 3.6 per cent in January.
A second report from the Labor Department showed initial claims for state unemployment benefits slipped 5,000 to a seasonally adjusted 382,000, a touch below economists’ expectations for a fall to 383,000.
The four-week moving average of new claims – a better measure of underlying trends – dropped 1,500 to 385,250, the lowest since mid-July 2008.
It was the fourth straight week the closely watched average held below the 400,000 level that economists associate with steady job growth.
Until recently the economy’s job production had been dismal, but in February employers hired 192,000 new workers, the most in nine months.