Big-Ticket Items See Drop in Demand

New orders for long-lasting U.S.-made goods slipped in January and initial claims for unemployment benefits rose last week, but rising business demand for capital goods showed the economy still on solid ground.

Durable goods orders tumbled 0.9% in January as demand for autos and civilian aircraft fell, but the drop followed an upwardly revised 1.4% December gain, the Commerce Department said Thursday.

Separately, the Labor Department said first-time claims for unemployment aid rose by 9,000 to 312,000 last week.

Wall Street had forecast claims of about 305,000 and had expected orders for durable goods -- expensive items meant to last three years or more -- to post a slight rise.

The details of the reports, however, were mostly upbeat, showing businesses poised to spend and the number of people on the jobless benefit rolls dropping.

“Both releases indicate that the economy has significant momentum starting 2005,” said Mark Zandi, chief economist at Economy.com in West Chester, Pa.

A 5.3% plunge in demand for transportation equipment lay behind the drop in orders for durable goods, which was the first since October. Motor vehicle demand slipped 3.8% and orders for civilian aircraft plummeted 27.1%.

However, excluding the often-volatile transport category, durable goods orders climbed 0.8%, exceeding expectations of a 0.3% rise.

In addition, economists said an order from Irish company Ryanair Holdings for planes from Boeing Co. valued at more than $4 billion, announced Thursday, would push future transport figures up.

The report also offered upbeat news on the outlook for business spending. Civilian orders for capital goods excluding aircraft -- a figure economists consider an indicator of business spending plans -- grew a healthy 2.9%.

In addition, shipments of durable goods rose 1.5%, building on a 2.8% December advance -- suggesting that spending on durable goods could help underpin economic growth at the start of the year.

Economists looked past the blip up in jobless claims at a trend they said reflected a strengthening job market.

A closely watched four-week moving average of initial claims, which smooths weekly volatility, fell for the second straight week to reach 308,750 -- its lowest level since November 2000, before the economy tipped into recession.

Though the low level of claims suggests that layoffs have slowed, the report also contained a sign that hiring might have picked up.

The number of people still on benefit rolls after claiming one week of insurance fell for the second week in a row, dropping 62,000 to 2.65 million in the week ended Feb. 12, the latest period for which figures are available.

In addition, a survey of chief executives from some of the world’s top companies found optimism on the U.S. economy’s prospects.

About 85% of the CEOs surveyed by the Business Council and the Conference Board said U.S. economic conditions were the same as or better than six months ago, and 40% expected further improvement in the next six months.