Factory Orders Off, Jobless Claims Up

The first drop in factory orders in three months and rising first-time claims for jobless benefits provided fresh evidence of a sluggish economy.

But some analysts said the Federal Reserve may not cut interest rates this month unless a key employment report today shows a drastic slowing in job creation.

The Commerce Department reported Thursday that orders to U.S. factories slipped 0.3 percent in October after two months of rising demand.

The Labor Department said the number of American workers filing first-time claims for jobless benefits shot up by 14,000 last week, the biggest jump in a month.

“The economy is not setting the world on fire,” said Raymond Worseck, chief economist at A.G. Edwards & Sons Inc., a St. Louis investment firm. “If we don’t get a substantial increase in payrolls, the pressure will be on the Federal Reserve to cut rates.”

The Labor Department announces its employment report for November on today.