Washington ? U.S. factory orders sank by the largest amount in nearly two years in August, and the number of workers filing new claims for unemployment benefits increased to a seven-year high last week, ominous signs that the economy is in sharp decline.

The bleak reports released by the government Thursday came after news earlier this week that manufacturing activity had tumbled to its lowest level since 2001 and consumer consumption had slowed sharply, heightening concern that the nation’s economy was sliding toward recession.

Taken together, the data suggest the economy was struggling even before the financial crisis intensified last month.

“There has been a lot of bad news. There is no question that the U.S. economy is heading for a recession,” said Nariman Behravesh, chief economist with Global Insight, a Massachusetts forecasting firm. “The only question is when did it start?”

The bad economic news has rattled investors on Wall Street, even as Congress considers a $700 billion bailout of the teetering U.S. financial system.

With the Senate’s approval of the package Wednesday night, the House is expected to vote on it today. But even if the legislation is approved, a recession would only be tempered, not averted, analysts said.

“The data we’ve seen recently suggests that the U.S. economy is entering a more dangerous phase, and we are likely to see overall GDP contract,” said Abiel Reinhart, an economist at J.P. Morgan Chase.