Jobless claims fall, durable orders mixed

New U.S. applications for unemployment benefits fell last week, but orders for a range of manufactured goods recorded their largest decline in two years in January, getting off to a slow start in the first quarter.

Initial claims for state unemployment insurance benefits fell 22,000 to a seasonally adjusted 391,000, the Labor Department said on Thursday. Economists had expected claims to drop to 400,000 last week.

“Jobless was some unambiguously good news for the economy. It is consistent with our belief that we are going to see a very strong gain in non-farm payrolls,” said David Resler, chief economist at Nomura Securities International in New York.

A separate report from the Commerce Department showed orders for long-lasting U.S. manufactured goods, excluding transportation, dropped 3.6 percent, the biggest fall since January 2009, after rising 3.0 percent in December.

Economists had expected orders excluding transportation to rise 0.4 percent last month.

U.S. stock futures held overnight losses after the data, while bond prices were little changed.

Overall durable goods orders rose 2.7 percent, the biggest increase since September, after falling 0.4 percent the prior month.

The rise in overall orders reflected a 4,900 percent surge in aircraft bookings, which likely reflected the bulk of December orders from aircraft maker Boeing, which analysts said had not been fully captured in the durable goods report for that month.

Outside transportation, there were big declines in orders for machinery, computers and communications equipment.

Durable goods orders are a leading indicator of manufacturing and the report suggested factory activity, a strong pillar of the economic recovery, was slowing down.

The Commerce Department report showed non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, dropped 6.9 percent last month, the biggest decline in two years, after a revised 4.3 percent increase in December. Markets had expected a 2.5 percent decline.

“It’s a weak start to the quarter, but the bottom line is capex is going to remain a pretty decent contributor to growth even with this weakness here in January,” said Tom Porcelli, U.S. economist at RBC Capital Markets in New York.

Core capital goods shipments, which go into the calculation of gross domestic product, fell 2.0 percent after rising 2.5 percent in December. Unfilled orders for manufactured durable goods rebounded in January, while inventories rose for the 13th straight month.