Factory orders down, jobless claims up

New orders at U.S. factories fell more than expected in August and jobless benefit claims climbed last week, government reports showed Thursday.

Factory orders fell 3.3% in August -- the largest decline since January -- on big drops in aircraft and auto orders, a Commerce Department report showed.

Analysts polled by Reuters had expected factory orders to slip 2.6%.

Also, orders for nondefense capital goods excluding aircraft -- viewed as a reliable indicator of business investment -- fell 0.5%, a slimmer drop than originally reported.

“Overall, today’s report confirms a somewhat lower trajectory of business investment in [the third quarter] than in [the second quarter], although broadly the business sector remains in an expansionary mode,” Barclays Capital economist Julia Coronado said.

August factory orders were dragged down by a 39.9% tumble in the volatile nondefense aircraft category and an 8.5% plunge in automotive orders, the sharpest decline in that category since December 2002, the Commerce Department said.

Orders for all types of transportation equipment slid 11.1%.

However, even when transportation orders were stripped out, factory orders fell 1.7%, the second decline in three months. Excluding defense products, orders fell 3.8%.

Meanwhile, the number of U.S. workers filing new claims for jobless aid rose by 16,000 last week, the Labor Department said.

Initial claims for state unemployment insurance benefits jumped to 317,000 in the week ended Sept. 29 from an upwardly revised 301,000 the prior week.

The new claims figures exceeded Wall Street economists’ forecasts for a rise to 310,000 in new jobless claims from the preliminary reading of 298,000 in the week ended Sept. 22.

“Jobless claims bounced back after two weeks of declines, but claims are still at a relatively low level that’s consistent with a healthy labor market,” said Gary Thayer, chief economist for A.G. Edwards and Sons in St. Louis.

“There’s no sign yet from these data that the economy is in recession,” Thayer said.

The four-week moving average of new claims -- a less volatile indicator of labor market conditions -- edged up to 312,750 in the week ended Sept. 29 from 312,250 the week before.

The number of people who remained on state jobless rolls after drawing an initial week of aid fell by 10,000 to 2.54 million in the week ended Sept. 22, the latest period for which figures were available. Economists had forecast 2.55 million.