Orders for costly US manufactured goods plunged in August and the number of workers filing new claims for jobless benefits shot up, according to government reports today that showed the economy rapidly weakening.
The Commerce Department said new orders for durable goods like new cars and refrigerators slumped by a sharper-than-expected 4.5% as demand for nearly every major category of manufactured item weakened from July.
Meanwhile, the Labor Department said new claims for jobless benefits jumped 32,000 last week to a seasonally adjusted 493,000, though it was primarily because of the impact of hurricanes Ike and Gustav.
The bleak data reinforced comments yesterday by Federal Reserve Chairman Ben Bernanke, who told Congress economic activity was broadly weakening.
The Fed chief warned the situation could get worse quickly if lawmakers do not quickly approve a bailout package to help buy bad assets from financial firms to try to free up credit markets.
Analysts said the data only reinforced a widespread impression that economic activity is fading in the second half of the year, perhaps more severely than anticipated.
Excluding transportation, August durables orders were down 3% after edging up 0.1% in July. The fall in orders excluding transportation was the steepest since the beginning of 2007.
Transportation orders tumbled 8.9% in August after rising 2.8% in July. Non-defence capital goods excluding aircraft, seen as a barometer of business spending plans, were down 2% after increasing by 0.4% in July.
Separate figures showed that US new home sales plunged 11.5% in August despite a sharp drop in prices. The Commerce Department reported that sales of new one-family homes stood at a seasonally adjusted annual rate of 460,000 units. This was lower than expected and represented a 34.5% fall from a year earlier.
