Recovery on track - Durable goods orders on rise again
WASHINGTON -- The nation's factories, hardest hit by last year's recession, saw fresh signs of improvement in April, with orders for costly manufactured goods rising for a fifth straight month.
The Commerce Department reported Thursday that orders for durable goods -- items expected to last at least three years -- jumped 1.1 percent, with demand especially strong for cars, communications equipment and machinery.
Economists were encouraged by the news, saying it may point to the beginning of a turnaround in capital spending by businesses, something that is necessary for a solid recovery for the national economy. Deep cuts to such spending were key to the economy's plunge into recession last year.
"This report seems to indicate that the collapse in investment is behind us and we are in the beginning stages of a rebound," said economist Joel Naroff of Naroff Economic Advisors.
Clifford Waldman, president of Waldman Associates, said business investment in new plants and equipment, which has fallen for five straight quarters, may actually post a small increase in the current quarter.
In other economic news, fewer Americans filed new claims for unemployment insurance, but people who are out of work are having trouble finding jobs.
The Labor Department reported that for the workweek ending May 18, initial jobless claims dropped by 9,000 to 416,000, an eight-week low.
But even with the decline, economists said claims are still high, suggesting that the job market remains sluggish.
The number of laid-off workers continuing to draw jobless benefits climbed to a 19-year high of 3.87 million for the work week ending May 11.
"If businesses are spending a little more on goods, they are continuing to hold the line on spending on workers," said Oscar Gonzalez, economist at John Hancock Financial Services.
On Wall Street, stocks staged a last-minute comeback.
The Dow Jones industrial average gained 58.20 points to close at 10,216.08.