Latest Data Show More Signs of Ailing Economy

The number of Americans signing up for jobless benefits rose last week, and orders for big-ticket items plunged in September, according to reports released Thursday that painted a grim picture of the U.S. economy.

Adding to the tide of negative data, a private research group said its index of help-wanted advertising also dropped.

Analysts said the reports hardened the conviction that the already weak U.S. economy had slid into a recession following the attacks on Sept. 11 and strengthened expectations that the Federal Reserve will cut interest rates for the 10th time this year when it meets Nov. 6.

“Clearly all of the numbers put together confirm the overall economic environment is becoming quite dismal,” said Anthony Karydakis, senior financial economist at Banc One Capital Markets in Chicago.

The Labor Department said the number of first-time claims for unemployment benefits rose 8,000 to a seasonally adjusted 504,000 for the week ended Oct. 20.

The four-week moving average of initial claims, considered a more reliable gauge than the weekly data, climbed 12,000 to 505,000.

That level has not been seen seen since March 1991, at the end of the last U.S. recession.

And in a sign workers who are losing their jobs are having trouble finding new ones, continued claims for state jobless benefits for the week ended Oct. 13--the most recent week for which data were available--rose 56,000 to 3.65 million, the highest level in more than 18 years.

“There’s no doubt that the claims data point to a significantly higher unemployment rate at some point in the next few months,” said Stephen Stanley, senior financial economist at Greenwich Capital Markets in Greenwich, Conn.

Last month, the unemployment rate was 4.9%, the highest level in four years.

In another report pointing to economic weakness, the Commerce Department said orders for costly U.S. durable goods fell for the fourth straight month.

Led by big declines in orders for aircraft, computers and communications equipment, the value of new orders for long-lasting goods last month plunged 8.5% to $165.4 billion, the lowest level since August 1996.

The drop in September followed a 0.5% decrease in August.

The decline in September was the biggest drop since January, and marked the first time durable orders fell for four straight months since the series began in 1992, Commerce Department officials said.

Durable goods are items that are meant to last for three years or more.

“The orders numbers suggest that capital spending is continuing to go down a black hole,” said Ian Morris, chief U.S. economist at HSBC Securities in New York.

Analysts largely shrugged off a report released by the government Thursday that showed that the compensation of U.S. workers climbed in the third quarter.

The Labor Department said its employment cost index, a broad gauge of what employers pay in wages, salaries and benefits, increased 1% for the third quarter.

That was up from a 0.9% increase in the second quarter.

“Right now, the Federal Reserve is not going to pay too much attention to inflationary and wage pressures,” said Asha Bangalore, an economist with Northern Trust Co. in Chicago. “The concern is how to revive the economy.”

The Conference Board said its index measuring the number of jobs offered across the United States declined in September to its lowest level since February 1982.

The private research group’s help wanted advertising index fell to 52 in September from 53 in August, as the sharp U.S. economic slowdown led to mounting layoffs and a weakening job market.

The index stood at 79 in September 2000.