Plus: Demand for Durables Falls, Eurozone Recovery Accelerates and RFID Market Forecast to Grow.

Durable Goods Orders Fall Sharply
Orders for durable goods in the United States dropped sharply in October, falling 3.3 percent in the largest monthly decline in nearly two years, according to the U.S. Department of Commerce on Wednesday.

New orders for manufactured durable goods in October declined by $6.8 billion to a total of $196 billion, the largest decrease since demand fell by 8 percent in January 2009. Transportation equipment had the steepest losses, dropping by 5.2 percent ($2.9 billion) in October. Excluding the often-volatile transportation sector, new orders were down 2.7 percent. Excluding defense goods, orders decreased 2.1 percent.

The unexpectedly sharp declines “caught analysts by surprise,” the Associated Press reports. “It marked the second drop in the past three months. Orders were down 0.8 percent in August and then rose a revised 5 percent in September, a gain that reflected a huge jump in demand for commercial aircraft.”

Durable goods shipments, also down two of the last three months, fell 0.9 percent ($1.8 billion) in October to $196.8 billion. Machinery shipments had the steepest decrease, falling by $0.9 billion to $24.6 billion.

Non-defense capital goods orders, a gauge for business investment plans and an important factor in calculating gross domestic product (GDP), decreased 4.5 percent last month, declining $3.3 billion to $70.8 billion.

“The October 2010 report on new orders for capital goods confirms a deceleration in the rate of growth all across the board of long lasting manufactured goods,” Thomas Duesterberg, the president and CEO of the Manufacturers Alliance/MAPI, said in an analysis of the durable goods report. “While the year-over-year data is still strong — new orders are up almost 15 percent — recent trends show that the rapid inventory accumulation that helps drive up the rate of growth is clearly slowing. The overall trend in capital investment, driven largely by replacement of old equipment, is also showing signs of a pause.”

In a separate report last week, the Commerce Dept. revised its estimate of GDP growth in the third quarter to an annual rate of 2.5 percent, up from an earlier estimate of 2 percent. The better-than-expected gains were attributed to stronger consumer spending, a slowdown in imports and acceleration in private inventory investment.

Jobless Claims Plummet to 2-Year Low
New initial jobless claims fell steeply in the latest week reported, boosting the prospects of a possible job market recovery. According to the U.S. Department of Labor, seasonally adjusted unemployment claims decreased by 34,000 for the week ending Nov. 20, bringing the total to 407,000, down from the previous week’s revised figure of 441,000 and the lowest weekly jobless level since July 2008.

Although the U.S. economy would have to generate roughly twice as many jobs as it did in October to rapidly drive down the national unemployment rate, which remains at 9.6 percent, the strong improvement in weekly jobless data has pushed claims into a range that indicates healthier employment conditions.

“The improvement can’t come fast enough for frustrated job seekers,” the Associated Press says. “Applications for jobless aid need to stay below 425,000 for several weeks to signal that hiring is accelerating, economists say. For the first 10 months of this year, claims mostly fluctuated around 450,000 until they began dropping in late October. They fell steadily last year from a peak of 651,000 in March 2009.”

Jobless claims tend to be volatile during the period between Veterans Day and Thanksgiving, but the Labor Dept. report accounts for these seasonal fluctuations. The number of people continuing to claim unemployment aid fell by 142,000 to 4.18 million, the lowest point in two years. The four-week moving average fell by 7,500 to 436,000 in the latest data.

Eurozone Recovery Accelerates
Growth in the Eurozone’s private sector expanded sharply in November, boosted by strong growth in France and Germany. Based on a survey of euro-area purchasing managers in services and manufacturing, the preliminary composite purchasing managers’ index (PMI) for the Eurozone rose from October’s 53.8 (an eight-month low) to 55.4 in November, according to financial-services firm Markit last week. A PMI level above 50 signals an expansion in activity, while a level below 50 signals a contraction.

The index “comfortably exceeded consensus expectations” in a Reuters poll, which forecast the PMI to fall to 53.1. The manufacturing PMI rose from 54.6 in October to 55.5 last month, while the November services PMI rose from 53.3 to 55.2.

“The flash PMI readings for November indicate that the Eurozone regained some of the growth momentum that had been lost since July’s peak,” Chris Williamson, chief economist at Markit, said. “Furthermore, with employment growing at the fastest rate since February 2008, unemployment should soon start falling from September’s all-time high and the recovery can move to a more mature, sustainable phase.”

However, economic growth across Europe “remains very unbalanced,” according to Williamson. “Growth outside of France and Germany appears to be stagnating at best. Consequently, euro-area economic growth in the final quarter looks unlikely to exceed 0.5 percent.”

Germany has powered Europe’s recovery while other nations have been much slower to emerge from the slump as governments step up austerity measures to rein in budget deficits. In November, Ireland became the second euro-area country, after Greece, to seek external aid. Bloomberg News notes that the economic rebound is also under threat from a global slowdown and a stronger euro.

RFID Market to Grow Through 2011
The total value of global radio frequency identification (RFID) system markets (excluding immobilization) is expected to reach almost $5.3 billion by the end of 2011, a year-over-year growth in excess of 16 percent, according to estimates from ABI Research.

RFID systems software revenue is forecast to outpace revenue from services, transponders and readers, an announcement of the findings states. When automobile immobilization is included, the total market size is approximately $6.2 billion, representing 13 percent growth next year.

The analyst firm forecasts a total market size of about $4.6 billion by the end of 2010 for RFID systems (hardware, software and services). The total reaches $5.5 billion when hardware-only shipments to support automobile immobilization are included.

Hotspots include “massive” retail deployments, momentum in the area of asset tracking and management, an “explosion” in passive ultrahigh frequency transponders and increased RFID focus in developing regions.

Based on current sales rates, the RFID market is projected to grow by approximately $600 million this year, rising from $5.03 billion in 2009 to $5.63 billion in 2010, according to a separate report from tech consulting firm IDTechEx in August.