Claims for unemployment aid fall to 369,000

• Durable goods orders, excluding transportation, weak in Sept.
• Weekly jobless claims report a proxy for layoffs
• Weaker manufacturing, hurt by global economy, stalls growth

WASHINGTON (AP) -- The number of first-time claims for unemployment benefits fell 23,000 to a seasonally adjusted 369,000 the week ended Oct. 20, the Labor Department said Thursday, reflecting an improving labor market .

In a separate report, the government said orders for long-lasting U.S. manufactured goods surged 9.9% in September by the largest amount in nearly three years, largely due to a rebound in aircraft orders. In August, orders had dropped 13.1%.

Orders for core capital goods, considered a proxy for business investment, were unchanged in September after a slight August gain. They exclude orders for aircraft and other transportation goods which are volatile month to month.

And a key category that tracks business investment showed weakness for a fourth straight month, the Commerce Department's report said, indicating companies remain uncertain about the future.

Manufacturing growth has slowed this year, weakening the economy. High unemployment and low pay have kept consumers from spending. Businesses have held back on investing in machinery and equipment. And slower global growth has dampened demand for U.S. exports.

On the employment front, applications for jobless benefits are a proxy for layoffs. When the weekly figures is below 375,000 over time, it suggests hiring is strong enough to lower the unemployment rate.

Applications have fluctuated between 360,000 and 390,000 since January. At the same time, employers have added an average of nearly 150,000 jobs a month.

That's barely enough to lower the unemployment rate, which has declined to 7.8% from 8.3% so far this year.

Employers are hesitant to add more workers as long as growth remains tepid and Europe's financial crisis threatens to push that region into recession.

Many also are holding off because they are worry about tax increases and government spending cuts that would kick in next year if Congress doesn't reach a budget deal to avert them.

The weak job market has been a key topic in this year's presidential election, which is down to its final days. Voters will have one final employment report to consider, which comes out four days before Election Day.

And economic growth remains subpar; it slowed to a tepid annual rate of 1.3% in the April-June quarter, down from 2% the previous quarter. Most economists see growth staying at or below 2% the second half of the year. The Commerce Department will issue its first estimate of growth in the July-September quarter Friday.