Mixed signals: Jobless claims, durable goods orders fall

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WASHINGTON — Two economic reports send mixed signals about the economy Thursday.

The Commerce Department said demand for durable goods dropped 0.3% in March, a third straight decline and the longest string of declines since the 2001 recession.

In a second report, the Labor Department said claims for unemployment benefits fell 33,000 last week to 342,000. Economists had been expecting claims to rise by 3,000.

The four-week moving average for claims fell 7,250 to 369,500. But even with the improvement, analysts are still worried that the weak economy is putting greater pressures on the labor market. The unemployment rate climbed to 5.1% in March as businesses laid off the largest number of workers in five years.

The 0.3% drop in orders for durable goods, items expected to last at least three years, followed even bigger declines of 0.9% in February and 4.4% in January.

The durable goods report underscores the problems manufacturers are facing from a severe economic slowdown. The last time orders fell for three consecutive months was February to April 2001, when the country was sliding into the last recession.

The weakness in manufacturing orders was led by a 4.6% drop in orders for autos, a sector hard hit by soaring gasoline prices and the weakening economy.

Orders in the category that includes home appliances fell 6.6%. That industry has been hurt by the two-year slump in home sales.

Orders for all transportation products fell 4.6%, reflecting the big drop in demand for autos. Orders for commercial aircraft actually rose 5.5% while demand for defense aircraft surged by 29.4%. Many defense industries have seen big increases reflecting the wars in Iraq and Afghanistan.

Excluding transportation, new orders increased 1.5%, but a key category viewed as a proxy for business investment plans showed no increase in March after a big 2% drop in February. Businesses have cut back on their plans to expand and modernize as the economy has softened.

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