WRAPUP 4-US durable goods orders edge up,jobless claims dip

* Durable goods orders up less than expected on aircraft

* Rise in orders ex-transportation beats forecasts

* New jobless claims for last week drop less than forecast
(Adds Bernanke confirmation, updates markets)

By Lucia Mutikani

WASHINGTON, Jan 28 (BestGrowthStock) – New orders for long-lasting
U.S. manufactured goods edged higher in December and the number
of workers filing applications for jobless aid fell last week,
indicating the economy remains on a recovery path.

The Commerce Department said on Thursday durable goods
orders rose 0.3 percent last month, held back by a surprise
drop in civilian aircraft orders that analysts saw as
temporary. The gain lagged economists expectations for a 2
percent rise.

Details of the report were much stronger, however, with a
proxy for business spending plans — non-defense capital goods
orders excluding aircraft — increasing a solid 1.3 percent.

On the jobs front, the Labor Department reported that
initial claims for state unemployment benefits dropped 8,000 to
470,000 last week, less than economists had expected, after
rising for three weeks in a row.

“We remain on track, but it’s not a strong, strong recovery
that would be consistent with the big downturn,” said Kurt Karl
head of economic research at Swiss Re in New York.

Economists took encouragement from the rise in business
spending plans and saw the day’s data as having little impact
on perceptions of an economy steadily recovering from the worst
downturn since the 1930s.

“Businesses are now feeling confident enough to deploy a
larger portion of the recent strong corporate earnings rebound
into new investment spending,” said Brian Bethune, chief U.S.
financial economist at IHS Global Insight in Lexington,

In a boost to economic confidence the U.S. Senate on
Thursday approved Ben Bernanke’s nomination to a second
four-year term at chairman the Federal Reserve, despite stiff
opposition. The Senate voted 70-30 to confirm Bernanke.

U.S. stocks (Read more about the stock market today. ) fell, however, pummeled by weak outlooks from
tech firms Qualcomm Inc (QCOM.O: ) and Motorola Inc (MOT.N: ) and
worries about Greece’s fiscal health. The fall in stocks
revived demand for the least risky U.S. government bonds,
lifting prices for Treasuries.


But even as declines in housing sales in December reported
earlier this week hinted at renewed weakness in the housing
market and cast a cloud on the economy’s recovery, the fourth
quarter is seen having grown.

The government’s report on fourth-quarter gross domestic
product on Friday is expected to show the economy expanded at a
4.6 percent annual pace as businesses liquidated inventories
less aggressively and in some cases started rebuilding stock.

The economy grew 2.2 percent in the third quarter.

The Federal Reserve on Wednesday painted a cautiously
optimistic picture of the economy and stuck to its promise to
keep interest rates near zero percent for an extended period to
ensure a sustainable recovery.

Stubbornly high unemployment is, however, still dogging the
recovery. On Wednesday, President Barack Obama in his annual
State of the Union address said, “Jobs must be our number one
focus in 2010.”

Economists had forecast a much bigger decline in new claims
for jobless benefits last week, seeing a drop to 450,000,
compared with the 470,000 reported on Thursday by the Labor
Department. That was down from 482,000 for the prior week,
which had been elevated due to a backlog of applications from
the holidays.

The report showed the four-week moving average for new
jobless claims, a better measure of underlying trends, rose for
the second week after 19 weeks of decline.

“The progress in the labor markets is painfully slow. The
economy is not creating sufficient jobs to quickly reduce the
unemployment rolls, although the pick-up in the manufacturing
sectors will help,” said Keith Springer, president of Capital
Financial Advisory Services in Sacramento, California.

Civilian aircraft bookings fell 38.2 percent last month,
building on a 40.0 percent drop in November, the Commerce
Department said. Plane maker Boeing (BA.N: ) said in December it
had received 59 orders, up from November’s nine, and analysts
had expected that to lift the government’s measure of orders.

Analysts expect the Boeing orders to be reflected in the
report for January.

Durable goods orders are a leading indicator of
manufacturing activity, which in turn provides a good measure
for overall business health.

New durable goods orders excluding transportation rose 0.9
percent last month after increasing 2.1 percent in November,
the department said, beating market expectations for a 0.5
percent gain.

Shipments, which go into the calculation of gross domestic
product, surged 2.9 percent last month — the biggest rise
since July. They rose 0.8 percent in November. Analysts said
strong shipments raised the risk that fourth-quarter GDP could
exceed market expectations.

For a graphic on U.S. durable goods, see


Stock Basics

(Additional reporting by Doug Palmer in Washington; Editing by
Leslie Adler)

WRAPUP 4-US durable goods orders edge up,jobless claims dip