May 28 (Bloomberg) -- Durable-goods orders hovered near a 13-year low and the number of Americans collecting unemployment insurance reached a 17th straight record, offering no sign of an imminent rebound from the worst U.S. recession in half a century.

Orders rose 1.9 percent in April after a 2.1 percent drop in March that was more than twice as large as previously estimated, the Commerce Department said in Washington. Meanwhile, the Labor Department said 6.79 million people are collecting jobless benefits, and another report showed new-home sales were lower than forecast in April.

Today’s figures indicate that while the pace of the economy’s contraction may be easing, there’s no signal yet that it is ready to grow. Rising unemployment will keep consumer spending in check, making companies reluctant to ramp up investment and builders hesitant to start work on properties.

“We have a tough slog ahead of us,” said Carl Riccadonna, a senior U.S. economist at Deutsche Bank Securities Inc. in New York. “The recovery is going to be very slow in its emergence.”

Stocks recouped some of their losses from yesterday, while Treasuries rose after a four-day tumble. The Standard & Poor’s 500 Stock Index closed up 1.5 percent at 906.83, while yields on benchmark 10-year notes dipped to 3.64 percent at 4:21 p.m. in New York from 3.74 percent late yesterday.

Builder Shares

The S&P 500 Supercomposite Homebuilding Index slid 4.4 percent after the Mortgage Bankers Association reported record foreclosures jumped in the first quarter, indicating that the government’s effort to revive the housing market has lost momentum. Pulte Homes Inc., Hovnanian Enterprises Inc. and Centex Corp. were down more than 6 percent.

A rebound in automobile orders and a jump in defense spending spurred the gain in durable-goods orders in April.

Companies, which have record levels of spare capacity, will probably continue to trim spending on capital equipment such as computers until sales show sustained gains. The worst credit crisis since the Great Depression has prompted economists to scale back forecasts for growth in the second half of the year.

“There really is no reason now to expect capital goods orders to be picking up,” Mickey Levy, chief economist at Bank of America Corp. in New York, said in an interview with Bloomberg Television. “What we can hope for in the second quarter is lesser decline than in the first.”

Excluding transportation, durable-goods orders climbed 0.8 percent, today’s Commerce Department report showed.

Increase Forecast

Economists forecast orders would rise 0.5 percent, according to the median of 73 estimates in a Bloomberg News survey, after a previously reported 0.8 percent decline in March. Projections ranged from a drop of 2.4 percent to a gain of 3.8 percent.

Sales of new houses increased 0.3 percent in April to an annual pace of 352,000, Commerce also reported today. The median sales price decreased 15 percent from a year earlier, and the number of homes on the market fell to the lowest level in almost eight years.

Near record-low mortgage rates, bargain pricing and tax credits for first-time buyers are helping to put a floor under purchases after almost four years of declines. Still, rising unemployment and tight credit indicate sales will not rebound much in coming months, economists said.

Less Inventory

“The good news is probably the continued improvement in inventory levels,” said Adam York, an economist at Wachovia Corp. in Charlotte, North Carolina. “We’ll take the improvement in the new-home market as a sign we’re getting closer to the bottom and we might see some stability in the housing market by the summer.”

One reason a projected recovery later this year will be subdued is that the job market remains soft. Initial jobless claims fell by 13,000 to 623,000 in the week ended May 23, the Labor Department’s report showed.

Still, the unemployment rate among people eligible for benefits, which tends to track the jobless rate, rose to 5.1 percent in the week ended May 16, the highest since December 1982, from 5 percent the prior week.

Economists surveyed by Bloomberg this month projected the jobless rate, currently at a 25-year high of 8.9 percent, will climb to 9.6 percent by the end of 2009. This month’s jobs report is due June 5.

Auto Slump

Claims in coming weeks may climb amid restructuring in the automotive industry. General Motors Corp. plans to file for Chapter 11 bankruptcy on June 1, people familiar with the plan said today. Chrysler LLC already idled factories following its bankruptcy petition.

The shutdowns are rippling through the industry. Visteon Corp., the former parts-making unit of Ford Motor Co., and chassis manufacturer Metaldyne Corp. filed for bankruptcy protection today.

Metaldyne’s bankruptcy resulted from “the dramatic and well-publicized pressures in the global auto industry” and a lack of liquidity as sales fell, debt mounted and banks curbed lending, Chairman and Chief Executive Officer Thomas A. Amato said in a court filing.

To contact the reporters on this story: Courtney Schlisserman in Washington Cschlisserma@bloomberg.net; Shobhana Chandra in Washington schandra1@bloomberg.net

Last Updated: May 28, 2009 16:28 EDT