WRAPUP 4-Weak U.S. data raises worries about recovery

* Durable goods orders surge on aircraft bookings

* Orders ex-transportation unexpectedly fall

* Jobless claims rise for second straight week
(Updates with closing market action)

By Lucia Mutikani

WASHINGTON, Feb 25 (BestGrowthStock) – Demand for a wide range of
U.S. manufactured goods unexpectedly fell in January, while new
applications for jobless benefits rose again last week, the
latest data to suggest a step back in the economy’s recovery.

The Commerce Department said on Thursday durable goods
orders, excluding transportation, slipped 0.6 percent last
month, but overall orders jumped as civilian aircraft bookings
surged 126 percent.

Separately, the number of people filing initial claims for
jobless aid rose for a second straight week last week, topping
analysts’ expectations, although the figures were likely
affected by snowstorms that blanketed parts of the country.

“Rising jobless claims and weaker orders suggest the
economy is retrenching in the first half of the first quarter,”
said Chris Low, chief economist at FTN Financial in New York.

Still, he said the data did not suggest the start of a
“double dip” recession. “Some back-and-fill is standard
operating procedure in recoveries,” Low said.

The weak reports and threats from rating agencies to
downgrade Greece’s sovereign debt pulled U.S. stocks (Read more about the stock market today. ) down.
Prices for U.S. government debt soared, while the dollar neared
a nine-month high against the euro.

The data, coming in the wake of reports showing a drop in
consumer confidence and a plunge in new home sales to a record
low in January, supported views economic growth would slow in
the first quarter after a brisk 5.7 percent pace in the
October-December period.

“The fourth quarter was supported by a swing in
inventories. That adds to growth, but it’s not something that
can be sustained over time,” said Andrew Gledhill, an economist
at Moody’s Economy.com in West Chester, Pennsylvania.

“First quarter (growth) will be more dependent on how the
U.S. consumer is doing and what kind of production levels
manufacturing is doing. It’s more the underlying economy, less
the kind of temporary technical factors.”

WEATHER BLAMED

The economy resumed growth in the second half of 2009 after
the worst downturn since the 1930s. However, employment is
lagging the recovery and weekly jobless claims have failed to
hold retreats made since mid-November.

The latest report from the Labor Department on Thursday
showed first-time filings for state unemployment benefits rose
to 496,000 last week from 474,000 a week earlier.

An analyst with the department said snowstorms may have
kept some workers sidelined and could have delayed the
processing of claims, leading to the unexpectedly large spike.

While economists remained optimistic the economy would
start to create jobs in the first half of the year, they
worried the continued rise in jobless filings could be a sign
of a shift in the downward trend that layoffs had displayed.

Federal Reserve Chairman Ben Bernanke also acknowledged the
harsh weather could negatively impact employment data, but he
said he expected the effects to be temporary.

“We will have to be particularly careful about not over
interpreting the data,” he told a congressional committee.
[ID:nN24174891]

Since the start of the recession in December 2007, payrolls
have dropped every month, except in November last year when
employers added 64,000 jobs.

Durable goods orders, excluding transport, were pulled down
last month by the biggest decline in a year in orders for
machinery. Economists had expected a 1 percent gain.
Disappointment was tempered by an upward revision that showed
non-transport orders increased 2 percent in December.

In January, motor vehicles and parts orders saw their
largest fall in eight months, and a closely watched gauge of
business spending dropped 2.9 percent after a 3.3 percent rise
in December.

Shipments, which go into the calculation of GDP, slipped
0.2 percent. They rose 2.4 percent in December.

Some analysts drew comfort from gains in some categories,
in particular large orders for computers and electronic
products, which they said pointed to increased business
investment in equipment and software.

“Unfilled orders increased for the first time since
September 2008 and inventories did not fall for the first time
since December 2008,” said Tony Crescenzi, portfolio manager at
PIMCO in Newport Beach, California. “In this context these data
are not as bearish for the economy as the core data suggest.”

Durable goods inventories were flat last month after easing
0.2 percent in December. Unfilled orders rose 0.1 percent,
snapping a record 15 straight months of decline.

For capital goods graphic, see:
http://link.reuters.com/dak72j

Stock Basics

For jobless claims graphic see:
http://link.reuters.com/kuk72j
(Additional reporting by Doug Palmer; Editing by Andrew Hay)

WRAPUP 4-Weak U.S. data raises worries about recovery