WRAPUP 1-U.S. jobs picture improving, manufacturing may be slowing
* Jobless claims fall 10,000 last week
* Continuing claims lowest since January 2008
* Gauge of business spending plans falls again in October
* New durable goods orders drop 2 percent in October
WASHINGTON, Nov 27 (Reuters) - The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, offering signs of a steady improvement in the labor market.
While the jobs picture is brightening a bit, factory activity appears to be losing momentum, with business spending on capital goods weakening and new orders for long-lasting manufactured goods falling last month.
Initial claims for state unemployment benefits fell 10,000 to a seasonally adjusted 316,000, the Labor Department said on Wednesday. Economists polled by Reuters had expected first-time applications to rise to 330,000 last week.
The four-week moving average for new claims, which irons out week-to-week volatility, slipped 7,500 to 331,750.
A Labor Department analyst said no states had been estimated and there were no special factors influencing the report. However, he noted that adjusting the data for seasonal fluctuations around this time of the year remained a challenge.
A separate report from the Commerce Department showed non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dropped 1.2 percent in October.
It was the second month of declines after orders for these so-called core capital goods fell 1.4 percent in September. Economists polled by Reuters had expected this category to increase 0.6 percent.
The unexpected drop in core capital goods orders suggested some ebbing in the manufacturing sector's recently found strength. It could also be an indication that a 16-day partial government shutdown last month hurt business confidence.
At the same time, orders for durable goods - items from toasters to aircraft that are meant to last at least three years - fell 2 percent, largely because demand for civilian and defense aircraft tumbled.
Durable goods orders had increased 4.1 percent in September.
The U.S. dollar extended losses versus the euro after the data but extended gains versus the yen.
The weakness in core capital and durable goods orders is at odds with national factory surveys, which have shown strength in the manufacturing sector.
The tone of the durable goods report was generally mixed, with gains in new orders for primary metals, computer and electronic products, motor vehicles and electrical equipment, appliances and components.
Core capital goods shipments, used to calculate equipment spending for the government's measure of gross domestic product, fell 0.2 percent after slipping by a similar margin in September.
The second straight month of declines suggested investment in equipment would probably not rise much this quarter after falling in the third quarter for the first time in a year.
While businesses are no longer aggressively laying off workers, they have not significantly stepped up hiring as domestic demand remains lukewarm.
The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 91,000 to 2.78 million in the week ended Nov. 16. That was the lowest level since January 2008.
The so-called continuing claims data covered the household survey week from which the November unemployment rate will be calculated. Continuing claims fell 74,000 between the October and November survey periods, suggesting some improvement in the jobless rate after it rose to 7.3 percent in October.
The insured unemployment rate fell to 2.1 percent from 2.2 percent, the lowest since September.
(Reporting By Lucia Mutikani; Editing by Krista Hughes)