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Weekly US Jobless Claims Fall; Durable Goods Orders Drop

The number of Americans filing new claims for jobless benefits fell last week to near a four-year low, while new orders for long-lasting U.S. manufactured goods dropped in June.


Initial claims for state unemployment benefits dropped 35,000 to a seasonally adjusted 353,000, the Labor Department said on Thursday.

That was a much sharper drop than economists expected. The prior week's figure was revised slightly higher.

The reading for jobless claims has been volatile this month because of the timing of the annual auto plant shutdowns for retooling. The reading had touched a four-year low in the July 7 week at 352,000. One measure that tries to smooth out this volatility, the four-week moving average for new claims, fell 8,750 to 367,250.

This year, automakers are carrying out fewer temporary plant shutdowns, throwing off the model the department uses to smooth the data for typical seasonal patterns.

A Labor Department official said they were still experiencing volatility related to the auto layoffs that usually happen at this time of year. Otherwise, the data had few blips. Only figures for Utah were estimated.

The labor market has suffered three months of sub-100,000 job growth as the economy slowed amid a cloud of uncertainty spawned by fears of sharp contraction in fiscal policy and debt problems in Europe.


Federal Reserve Chairman Ben Bernanke told lawmakers last week that the U.S. central bank, which last month expanded its efforts to spur the economy, would take additional action if officials concluded no progress was being made towards higher levels of employment.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 30,000 to 3.287 million in the week ended July 14.

Durable Goods Orders Ex-Autos Drop in June

The Commerce Department said on Thursday durable good orders excluding transportation dropped 1.1 percent, the biggest decline since January, after rising 0.8 percent in May. Economists had forecast this category being flat last month.

Overall orders increased 1.6 percent as demand for aircraft surged, after an upwardly revised 1.6 percent increase the prior month.

Economists polled by Reuters had forecast orders for durable goods, items from toasters to aircraft that are meant to last at least three years, rising 0.4 percent after previously reported 1.3 percent increase in May.

Details of the report were generally weak, with declines in new orders for computers, fabricated metal products, electrical equipment and appliances and machinery.

Fears of tighter U.S. fiscal policy in early 2013 and a lingering debt crisis in Europe are dampening demand, causing a cooling in manufacturing activity. Factories have been the main pillar of support for the sluggish economic recovery.

Last month, orders for transportation equipment rose 8.0 percent as demand for civilian aircraft soared 14.3 percent, offsetting a 0.6 percent fall in new orders for motor vehicles. The decline in autos was the largest since September last year.


Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.4 percent after increasing 2.7 percent May.

Economists had expected this category to rise 0.6 percent after a previously reported 2.1 percent increase the prior month.

Shipments of non-defense capital goods orders excluding aircraft, used to calculate equipment and software spending in the gross domestic product report, increased 1.2 percent after rising 1.1 percent in May.

The increase suggests spending on equipment and software grew in the second quarter, but probably nowhere near levels seen in 2011.

The government is expected to report on Friday that the economy grew at a 1.5 percent annual rate in the second quarter, according to a Reuters survey, slowing from the 1.9 percent rate in the prior three months.

Copyright 2012 Thomson Reuters. Click for restrictions.


Eric D. Schwerin
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