Hijjah 18, 1431 / Nov. 24, 2010, SPA -- New orders for U.S. durable goods fell unexpectedly in October by the largest amount in nearly two years, and an index of business capital spending plans dropped, according to a government report Wednesday that suggested a slowdown in factory activity. The Commerce Department said orders for durable goods-expensive manufactured items expected to last at least three years-plunged 3.3 percent, the biggest decline since January 2009, after jumping by 5 percent in September. The drop in durable-goods orders last month reflected lower demand for machinery, computers, communications equipment, and defense aircraft. Orders for non-defense capital goods excluding aircraft - a closely watched gauge of business spending - fell 4.5 percent in October after rising 1.9 percent the previous month. Economists had expected a 1 percent increase. Durable-goods orders are a leading indicator of manufacturing, and the report suggested factory activity could be faltering. Manufacturing has led the economy's recovery from the worst recession since the 1930s. Meanwhile, the Labor Department reported Wednesday that new claims for unemployment benefits fell more than expected last week, signaling continuing improvement in the struggling labor market. Initial jobless claims fell a bigger-than-expected 34,000 to 407,000 last week, the lowest since July 2008, just before the financial crisis intensified.
