Factory orders rebound in Feb.; unemployment claims hit highs

WASHINGTON -- Orders to factories posted an increase in February after six straight monthly declines, providing another glimmer of hope that the economy's deep plunge may be starting to moderate.

The Commerce Department said Thursday that orders for manufactured products rose 1.8% in February, much better than the 1.1% decline economists had expected. Factory orders, reflecting spending by consumers and businesses, is watched as a leading indicator of the economy's direction.

The rebound may prove temporary, given all the forces that are continuing to batter the economy. But still, analysts say the string of better-than-expected reports in recent days could be signalling that the economy's severe slide may be starting to ease.

Earlier Thursday, the Labor Department said the number of Americans filing new jobless claims jumped unexpectedly last week, while those continuing to receive benefits hit a 10th straight record high. Both figures show the labor market remains weak.

A recovery in employment usually lags other economic indicators as businesses are cautious about hiring until they are sure a recovery is underway.

The Labor Department said Thursday that initial claims for unemployment insurance rose to a seasonally adjusted 669,000 from the previous week's revised figure of 657,000. That total was above analysts' expectations and the highest in more than 26 years, though the workforce has grown by about half since then.

The tally of laid-off workers claiming benefits for more than a week rose 161,000 to 5.73 million, setting a record for the 10th straight week. That also was above analysts' expectations and indicates that unemployed workers are having difficulty finding new jobs.

As a proportion of the workforce, the number of people on the jobless benefit rolls is the highest since May 1983.

Employers are eliminating jobs and taking other cost-cutting measures to deal with sharp reductions in consumer and business spending. The current recession is the longest since World War II.