WASHINGTON – U.S. factory orders showed solid gains in March, suggesting sluggishness in business spending may have been short-lived, but private sector hiring in April was modest, reports released Wednesday showed.
Orders at U.S. factories rose a greater-than-expected 3.1 percent in March on a rise in civilian aircraft orders, but were also greater for the first time since December when transportation orders were excluded, a Commerce Department report showed.
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Analysts polled by Reuters were expecting factory orders to rise 2.1 percent. February orders were revised to show a 1.4 percent gain.
U.S. Treasury debt prices dipped and the dollar edged higher after the report.
"One thing we are seeing here is that the slump in capital orders is abating," said Richard DeKaser, chief economist for National City Corp. in Cleveland.
"Angst and fears over a recession are diminishing," he added.
A separate report showed private-sector hiring in April was more tepid than economists had expected.
The report from ADP Employer Services, which gave a slight lift to U.S. government bond prices, showed private employers added 64,000 jobs last month after a revised 98,000 job increase in March.
Economists had expected the report, which comes ahead of a Labor Department report on payroll growth on Friday, to show private payrolls expanded by 100,000 jobs.
Meanwhile, traders were betting Wednesday that the government data would show U.S. employers added 96,100 jobs in April, according to the preliminary implied median market forecast of a derivatives auction.
The result was below the 100,300 jobs implied in an auction Tuesday and compared with the median forecast of economists in a Reuters poll for a 100,000 rise in April.
In addition, a separate independent report released Wednesday showed planned U.S. layoffs jumped 44 percent in April, led by a surge in financial sector job cuts after Citigroup (C) announced it would eliminate 17,000 positions.
Announced layoffs totaled 70,672 in April, up from 48,997 in March and about 18 percent more than the 59,688 announced in the same month a year earlier, according to Challenger, Gray & Christmas Inc., an employment consulting firm.
The U.S. Labor Department will issue the April nonfarm payroll report on Friday at 8:30 a.m. (1230 GMT).
At the same time, pointing to a stronger-than-expected manufacturing sector, the government said factory orders, aside from transportation, rose 1.9 percent after being unchanged in February. February orders excluding transportation were first reported as down 0.4 percent.
Orders for durable goods, items meant to least three years or longer, also rose a bigger-than-expected 3.7 percent in March. Analysts were expecting durables orders to gain 3.3 percent.
Nondefense capital goods orders excluding aircraft, considered a proxy for business spending, rose 4.8 percent, the first gain in three months and the largest rise since September 2004.
Transportation orders jumped 9.5 percent on a 38.1 percent increase in civilian aircraft and parts. Orders for metals, machinery, electronic products and electrical equipment all rose.
Stripping out defense goods, orders rose 3.5 percent in March.
A separate report showed U.S. mortgage applications rose for a second straight week as demand for home purchase loans outweighed slower refinancing activity, an encouraging sign for a housing market that has been weak.
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