Increased demand for capital equipment pushed orders for U.S. manufactured goods up 0.7 percent to $423.85 billion in November, the Commerce Department said in a report showing continued strength for factory production and shipments and offering positive signals for future freight volume.
The unexpected gain came as economists surveyed by Dow Jones Newswires had forecast a 0.1 percent decline in November factory goods.
Factory inventories rose 0.8 percent, the 10th increase in 11 months, but stayed in line with shipments, which also increased 0.8 percent. The inventories-to-shipments ratio was unchanged at 1.28, meaning factories have enough inventory to supply 1.28 months of demand at the current pace.
Excluding a drop in demand for airplanes and autos, factory orders jumped in November by the largest amount in eight months. Non-transportation orders to factories were up 2.4 percent.
The November increase left total orders at $424.5 billion, 20.4 percent above the recession low in March 2009 and in a range that economists consider healthy for manufacturing activity.
The Commerce Department's data came a day after the Institute for Supply Management said its manufacturing index rose to 57 in December from 56.6 in November. A reading above 50 indicates expansion. The closely watched ISM index is based on a survey of manufacturing purchasing managers.
Manufacturing has been a relatively strong point in the U.S. economy, partially offsetting sluggish consumer demand during much of the last two years.
The Commerce Department said orders for durable goods, which make up over half of total factory demand, fell 0.3 percent in value, less than the 1.3 percent decrease estimated by the government Dec. 23. Orders for non-durable goods, including food, petroleum and chemicals, climbed 1.7 percent, largely because of rising commodity costs.
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