Posted on 04/24/2003 6:59:52 AM PDT by nypokerface
WASHINGTON (Reuters) - Orders for big-ticket U.S. manufactured items rose unexpectedly in March, buoyed by healthy demand across most categories, the government said on Thursday in a report showing badly needed improvement in the hard-hit factory sector.
But the labor market eroded further, as the number of workers signing up for unemployment aid last week hit its highest level in more than a year, a separate report showed.
Still, signs of a pickup in business spending, crucial to a strong recovery for the U.S. economy, were evident in the Commerce Department's latest data on durable goods orders.
Commerce said new orders for durable goods -- items designed to last three years or more -- rose 2.0 percent after declining 1.5 percent in February. It was the second increase in the last three months and a far better showing than the 0.5 percent decline economists in a Reuters poll had forecast.
"The durable goods orders may be a sign that the economy is starting to strengthen again," said Patrick Fearon, Economist, A.G. Edwards & Sons Inc., St. Louis.
The dollar inched up a bit against the euro after the data while U.S. Treasury bonds eased slightly.
Excluding demand for defense goods as the U.S. went to war with Iraq, durable goods orders still rose a solid 1.3 percent. Stripping out the volatile transportation sector, orders rose 1.8 percent, the biggest monthly gain since July of last year.
The report will no doubt come as welcome news to Federal Reserve officials who have highlighted a pickup in business spending as the key ingredient for a strong economic recovery.
In further evidence businesses may indeed be picking up their spending, demand for computers and electronic products rose 4.0 percent in March.
JOBLESS CLAIMS UP
A separate report from the Labor Department showed a rise of 8,000 first-time jobless claims to a seasonally adjusted 455,000 for the week ended April 19.
It was the highest level hit since March of last year and the tenth straight week that claims held above the key 400,000 point, seen by economists as an unhealthy labor market.
The four-week moving average, considered a more reliable measure because it irons out weekly gyrations in the data, rose to its highest level since April of last year.
"That's troubling. The labor problem has clearly dragged on even after the war is over. It shows that there are fundamental problems with the economy that you can't blame entirely on the war," said Christopher Low, Chief Economist at FTN Financial in New York.
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