Increase in orders for manufactured goods smaller than expected

WASHINGTON - Orders to U.S. factories posted a smaller-than-expected increase in November as demand for autos, machinery and steel all posted declines, reflecting the slowdown that has hit the manufacturing sector.

The Commerce Department reported that orders for manufactured goods rose by 0.9 percent, only a slight rebound after a sharp 4.5 percent drop in October. Analysts had been expecting a stronger 1.4 percent increase.

The November performance provided evidence that the slowing economy is beginning to have an impact on manufacturers, with auto plants and sectors supplying the slumping housing industry among some of the hardest hit.

A separate report showed that service industries, where most Americans work, were also experiencing the impact of the economic slowdown. A closely watched gauge of nonmanufacturing activity compiled by the Institute for Supply Managemement edged down slightly to a reading of 57.1 in December compared to 58.9 in November.

The 0.9 percent increase in demand for manufactured goods pushed total orders to $394.3 billion. It reflected a 1.6 percent rise in demand for durable goods, slightly below an initial estimate of 1.9 percent, and an unchanged reading for nondurable goods. With the economy slowing sharply this year, orders have been down three of the past five months.

In other economic news, the number of laid-off workers filing claims for unemployment benefits shot up to 329,000 last week, a gain of 10,000 from the previous week and the largest total since late November.