Factory Orders Increased By More Than Expected In December

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With orders for durable goods increasing by much more than previously reported, the Commerce Department released a report on Thursday showing a stronger than expected increase in new orders for manufactured goods in December.

The reported showed that orders for manufactured goods increased by 1.0 percent in December following a matching increase in November. Economists had been expecting factory orders to increase by 0.5 percent compared to the 1.1 percent increase originally reported for the previous month.

Factory orders increased for the eighth time in the past nine months and were up 3.4 percent compared to the same month a year ago.

An upward revision to pace of durable goods orders growth contributed to the stronger than expected factory orders growth, with durable goods orders rising by 1.0 percent in December compared to the 0.3 percent increase that was reported last week.

The upwardly revised durable goods orders growth, which follows two consecutive monthly decreases, was partly due to a smaller than previously reported drop in orders for transportation equipment.

Orders for transportation equipment fell by 0.5 percent in December compared to the 2.0 percent drop reported last week. The revision came as orders for defense aircraft and parts rose by more than previously reported and orders for non-defense aircraft and parts fell by less than previously reported.

Excluding the revised decrease in orders for transportation equipment, factory orders increased by 1.2 percent in December compared to a 2.1 percent increase in November.

The report also showed that new orders for manufactured non-durable goods increased by 1.0 percent in December following a 2.2 percent increase in the previous month.

Additionally, the Commerce Department said that shipments of manufactured goods increased by 1.9 percent in December after rising by 1.6 percent in November. On the other hand, inventories of manufactured goods fell by 0.1 percent following a 0.2 percent increase in the previous month.

With shipments increasing and inventories falling, the inventories-to-shipments ratio fell to 1.29 in December from 1.32 in November.

The report also showed that orders for non-defense capital goods, excluding aircraft, which is seen as a good indicator of business spending, rose by 2.2 percent in December following a 3.2 percent increase in November.

With orders for durable goods increasing by much more than previously reported, the Commerce Department released a report on Thursday showing a stronger than expected increase in new orders for manufactured goods in December. The reported showed that orders for manufactured goods increased by 1.0 percent in December following a matching increase in November. Economists had been expecting factory orders to increase by 0.5 percent. (Market News Provided by RTTNews)