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December 25, 2009

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Durable goods orders point to recovery

NEW orders for durable United States-manufactured goods excluding transportation surged in November, and applications for jobless benefits fell last week, pointing to a firmly entrenched economic recovery.

The US Commerce Department said yesterday that orders excluding transportation surged by 2 percent in November after falling 0.7 percent the previous month.

A plunge in orders in civilian aircraft, however, saw overall orders for durable goods rising only 0.2 percent.

A separate report from the US Labor Department showed initial claims for state unemployment benefits fell by 28,000 to a seasonally adjusted 452,000 last week. That was the lowest since early September 2008.

"All evidence points to healing in the labor market. I would not be surprise to see a positive net payroll number in December. That would be the first time in about two years," said Robert Dye, senior economist at PNC Financial Services in Pittsburgh.

US stock index futures held gains, while prices of US government debt were slightly lower.

The labor market is mending after a bashing during the worst US recession since the 1930s, and employers last month cut the fewest number of jobs in more than a year.

The unemployment rate dipped to 10 percent from a 26-1/2-year high of 10.2 percent in October.

Yesterday's claims report also showed the number of people filing for benefits after an initial week of aid also fell to near a 15-month low in the week ended December 12, to 5.076 million from the previous week's 5.203 million.

Durable goods orders are a leading indicator of manufacturing activity and tend to give good indication of overall business health.

Non-defense aircraft and new parts orders fell 32.6 percent last month, the commerce department said.


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