Durable-Goods Orders Surge to Record High : Economy: 2% jump in October marks another sign of improvement in manufacturing. Applications for unemployment insurance fewer than expected.

Orders to factories for durable goods hit a record high in October, fresh evidence of modest improvement for U.S. manufacturing. The government also reported better than expected news on jobs.

Paced by increases for transportation orders, primarily aircraft and automobiles, overall orders jumped 2% to a seasonally adjusted $135.8 billion, the Commerce Department said Wednesday. That broke the record of $134.8 billion set in December, 1988, and marks the third straight monthly gain, the first time that has happened in a year.

Orders rose 1.1% in September, according to revised figures, even stronger than the department’s 0.7% initial estimate. They were up 2.5% in August.

The broad October gain “shows the manufacturing sector is doing better than it was a few months ago,” said Daryl Delano of Cahners Economics in Newton, Mass. “Even jobs are starting to look marginally better.”

The industrial sector had declined through much of the first half of the year. But with the recent advances, orders during the first 10 months were 9.1% above the same period a year ago.

Commerce Secretary Ronald H. Brown said the latest report “is evidence that the turnaround triggered by lower interest rates is now spreading through the manufacturing sector of the economy.”

The Labor Department, meanwhile, said the number of newly laid-off workers filing first-time applications for unemployment insurance rose 1,000 last week to 339,000.

That was far fewer than the 7,000 that many analysts had expected, since the previous reporting period included the Veterans Day holiday and thus fewer days in which to file.

The four-week moving average of jobless claims dropped by 2,250 to 343,250. Many analysts prefer to track the four-week average because it smoothes out the often volatile weekly figures.

“The claims data point to a gradual improvement in the labor market, though jobs remain hard to find and the labor market still contains plenty of slack,” said Bruce Steinberg, an economist with Merrill Lynch & Co.

The durable-goods orders were paced by a 5.5% surge in transportation tickets, primarily for aircraft and automobiles. That wiped out a 1.1% decline in September.

Other major sectors also posted gains: industrial machinery and equipment, up 1.3% following a 1.9% gain a month earlier; electronic and other electrical equipment, up 0.8% on top of a 3.4% increase in September, and primary metals, up 0.3% after a 4% advance.

Orders for non-defense capital goods excluding aircraft, a gauge of business plans to expand and modernize, jumped 1.5%. It was the eighth advance in the last nine months.

But reflecting the government’s military cutbacks, defense orders plunged 11.6% after falling 2.1% in September and 8.8% in August. Excluding this sector, orders jumped 2.7%.

Unfilled orders declined 0.4% to $426.7 billion, the lowest level since June, 1988. It was the eighth consecutive drop.

“It’s an indication that manufacturing has become more efficient,” Delano said. “It means manufacturers are able to meet demand with their current capacity.”

Some analysts, however, maintain that the backlog is shrinking because shipments are outpacing the growth in orders.

Shipments edged up 0.1% to $137.6 billion, the highest level on record. It was the third straight gain.