New orders for long-lasting U.S. manufactured goods rose last month and the number of workers filing applications for unemployment aid fell last week, indicating the economy remains on a steady recovery path.
The Commerce Department said on Thursday durable goods orders rose 0.3 percent after a 0.4 percent decline in November, which had previously been reported as a 0.7 percent drop in the government's most recent report.
Separately, initial claims for state unemployment benefits dropped 8,000 to 470,000 in the week ended January 23, after rising for three weeks in a row, the Labor Department said.
Economists polled by Reuters had forecast claims dipping to 450,000 from a previously reported 482,000.
The jobless claims number suggest that the job market is still struggling. However, it is encouraging that orders were up. To me, that reflects a continued return to normalization in production levels, which will be a positive for growth during the first quarter, said Alan Gayle, senior investment strategist at Ridgeworth Investments in Richmond, Virginia.
U.S. stock index futures pared gains on the reports, while Treasury debt prices trimmed losses. The U.S. dollar pulled back against the yen.
Orders were restrained by an unexpected drop in civilian aircraft bookings, which analysts had expected to boost orders by 2 percent last month. Plane maker Boeing
The report showed non-defense aircraft and parts orders tumbled 38.2 percent last month after a 40.0 percent drop the month before. Defense aircraft orders rose 14.7 percent after a 10.4 percent fall in November.
Orders for the whole of 2009 fell a record 20.2 percent, the department said.
Durable goods orders are a leading indicator of manufacturing activity, which in turn provides a good measure for overall business health.
The data came ahead of Friday's release of the fourth-quarter gross domestic product report, which is expected to show an acceleration in the growth pace as businesses liquidated inventories less aggressively and in some cases started rebuilding stock.
A Reuters survey forecast the economy expanded at an annual rate of 4.6 percent in the October-December period, which will be the fastest pace in nearly four years, after growing 2.2 percent in the third quarter.
The Federal Reserve on Wednesday painted a cautiously optimistic picture of the economy and stuck to its promise to keep interest rate near zero for an extended period to ensure a sustainable recovery.
New durable goods orders excluding transportation rose 0.9 percent last month after increasing 2.1 percent in November, the department said. Analysts polled by Reuters had expected new orders, excluding transportation to rise 0.5 percent.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, rose 1.3 percent in December from a 3.1 percent rise the prior month.
Durable goods inventories fell 0.2 percent last month after slipping 0.2 percent in November. Shipments, which go into the calculation of gross domestic product, surged 2.9 percent last month-- the biggest rise since July. They rose 0.8 percent in November.
(Reporting by Lucia Mutikani and Doug Palmer in Washington; Additional reporting by Ryan Vlastelica in New York, Editing by Andrea Ricci)