Jobless claims fall; factory goods orders increase

Tepid economic news: Jobless claims drop, factory orders up. The number of new claims for unemployment benefits fell last week and orders for factory goods increased last month.

The Labor Department said first-time jobless claims dropped 8,000 to a seasonally adjusted 470,000. Analysts had expected a steeper drop to 450,000.

And in a second report Thursday, the government said orders to U.S. factories for big-ticket manufactured goods posted a modest increase in December, but the gain wasn’t enough to keep orders from plunging a record amount for the entire year.

The Commerce Department said orders for durable goods edged up 0.3% last month, a much weaker showing than the 2% advance economists had been expecting.

For all 2009, durable goods orders plunged 20.2%, largest drop on records that go back to 1992. The decline highlighted the battering manufacturers have suffered during the recession. Economists are hoping that improving outlooks in the U.S. and globally will make 2010 a better year.

In the unemployment report, the four week average, which smooths out volatility, rose for the second straight week to 456,250. The average had fallen for 19 straight weeks before starting to rise. That decline that had given some analysts hope the economy would soon generate net job gains.

Economists closely watch initial claims, which are considered a gauge of the pace of layoffs and an indication of companies’ willingness to hire new workers.