Factory Orders Rise; Jobless Claims Fall

Factory orders rose more than expected in March, but spending on goods such as machinery and computer equipment--a barometer of business investment seen as crucial for the nation’s economic recovery--fell, data released Thursday showed.

A separate report showed the unemployed are having trouble finding work even though the number of Americans lining up to claim jobless benefits dropped last week.

“The economy is expanding, but we are simply growing at a slower rate,” said Sung Won Sohn, chief economist at Wells Fargo & Co. in Minneapolis. “We cannot really expect the economy to be growing as rapidly as it did in the first quarter.”

The economy rocketed along in the first three months of this year. The government said last week that gross domestic product, the broadest economic gauge, grew at a 5.8% annual pace, its fastest clip in more than two years.

Nevertheless, some of the recent data have raised questions about the speed of the recovery in the near term.

The Commerce Department said Thursday that new orders at U.S. factories rose 0.4%, beating economists’ expectations of a 0.1% rise. Nondurable goods led the way with a 1.6% increase.

But demand for machinery tumbled 1.2% and orders for computer products fell 1.9% in another sign that businesses remain skeptical about the recovery.

A separate report from the Labor Department said first-time jobless benefit claims--a guide to the job market and the pace of layoffs--fell 10,000 to 418,000 last week from 428,000 the previous week, but stayed well above Wall Street’s forecast of 407,000. The figure has been above the key 400,000 level for six weeks.

“The initial read suggests a bit more weakness in labor markets than one would have expected,” said Paul Ferley, assistant chief economist for Bank of Montreal.

The Labor Department is due to release today the closely watched monthly employment report for April. Analysts are expecting only a slight improvement in the jobs market.