U.S. Factory Orders Rose 1.8% in December, but Signals Are Mixed

Factory workersBy MARTIN CRUTSINGER

WASHINGTON -- U.S. factory orders increased in December even though companies trimmed their orders for goods that signal investment plans.

Factory orders rose 1.8 percent in December compared to November, when orders had fallen 0.3 percent, the Commerce Department said Monday.

But demand for core capital goods, a category considered a proxy for business investment plans, dipped 0.3 percent in December following strong gains of 3.3 percent in November and 3 percent in October.

Orders for durable goods, items expected to last at least three years, rose 4.3 percent, slightly below the 4.6 percent estimated in a preliminary report. The increase reflected strong gains for military and civilian aircraft.

Orders for non-durable goods such as petroleum products, chemicals and paper, declined 0.3 in December after a 1 percent drop in November. The weakness reflected declines in petroleum products, a drop that was related to declines in energy prices during the month.

For the year, total factory orders rose 3 percent to $5.66 trillion. This reflected a slowing in the manufacturing sector following an 11.8 percent rise in orders in 2011. Demand for investment goods fell 0.3 percent to $759.4 billion.

For December, orders for commercial airplanes rose 10.1 percent and demand for military aircraft jumped 56.4 percent. Orders for motor vehicles and parts dropped 1.2 percent. Demand for machinery fell 1.1 percent but orders for computers and other electronic products rose 4.1 percent.

The overall economy actually contracted in the October-December quarter at an annual rate of 0.1 percent, the first negative reading since the recession was ending in the summer of 2009. The decline reflected a big drop in defense spending, slower business stockpiling and a fall in exports.

However, other parts of the economy showed strength including housing and business investment on equipment and software, which rose at an annual rate of 12.4 percent, the best showing in more than a year and a rebound from a decline in business investment in the July-September quarter.

In other signs that the economy could be strengthening, the government reported Friday that employers added 157,000 jobs in January and job growth at the end of 2012 proved stronger than initially thought.

And the Institute for Supply Management reported that manufacturing grew at a faster pace in January, driven by an increase in new orders and more hiring at factories.

The institute's manufacturing index rose to 53.1 from 50.2 in December. It was the highest reading since April.

The report was an indication that manufacturing has started to grow again after struggling through most of 2012. Uncertainty about tax increases and deep government spending cuts had led many companies to reduce orders for machinery and equipment in the summer of 2012. And a weaker global economy had dampened demand for U.S. exports.


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dembaitnswitch

Repeal NAFTA, give incentives to companies wanting to re-locate to America, deport every illegal or give them citizenship and make them pay for their own stuff, no more handouts for anchor babies and other BS, if they did receive government handouts make them pay it back with interest. Welcome to America. Stop making people press one for English. Speak the language or go back to your own country. Stop giving money to countries that want us dead. That's just for starters.

February 04 2013 at 2:01 PM Report abuse rate up rate down Reply
1 reply to dembaitnswitch's comment
dembaitnswitch

Oh yeah, Fire Jeff Immelt as job czar, and repeal O'Hell care the other job killer.

February 04 2013 at 2:14 PM Report abuse rate up rate down Reply
Iselin007

The age of unrest is now spreading quickly from the young to the older people as people flip out.

February 04 2013 at 12:51 PM Report abuse -1 rate up rate down Reply
Iselin007

I'm afraid this worthless job market will push more people over the edge an there will be hardly a safe place to be.

February 04 2013 at 12:49 PM Report abuse rate up rate down Reply
Iselin007

The trade deals already destroyed the careers of the now much older workforce over the last 2 decades pushing them into a corner where they can't retrain for entry level jobs. The older worker can't buggy lug, unload trucks, or dig with shovels etc or get health insurance for the same . Taking their trade jobs basically ruined their lives and left many of them in the gutter.

February 04 2013 at 12:46 PM Report abuse +2 rate up rate down Reply
Iselin007

The longer it takes to get back to low unemployment the bigger the GDP will have to be an right now 7% may even be too low.

February 04 2013 at 12:26 PM Report abuse -1 rate up rate down Reply
dembaitnswitch

Poor Hostess

February 04 2013 at 12:17 PM Report abuse -1 rate up rate down Reply
dembaitnswitch

We all know weapon sales are up along with ammunition.

February 04 2013 at 12:02 PM Report abuse -1 rate up rate down Reply
kafienkarl

Many deny that Romney started the idea of a health care insurance mandate ie. RomneyCare. I hear very little on how to break the healthcare insurance monopoly. RomneyCare great but ObamaCare bad.......ridiculous.

February 04 2013 at 11:45 AM Report abuse +4 rate up rate down Reply
1 reply to kafienkarl's comment
dembaitnswitch

O'hell care sucks, since he signed that nightmare legislation rates have gone up considerably and so have all Americans taxes. Obama is a freaking liar.

February 04 2013 at 12:04 PM Report abuse rate up rate down Reply
1 reply to dembaitnswitch's comment
dembaitnswitch

Buy O'Hell care or go to jail.

February 04 2013 at 12:13 PM Report abuse rate up rate down
kafienkarl

The group thinking that the allowance of illegal immigration is the only the fault of 'liberals' is ridiculous.

February 04 2013 at 11:41 AM Report abuse -1 rate up rate down Reply
AL CONFER

Immigration reform as one comment on here is nothing more than AMNESTY for those that broke our laws, and do you honestly think these people will all of a sudden play by the rules? What it truly comes down to is they are creatures of habit and legal citizens will get screwed over by legalizing criminals. Why bother sending your child to college when the illegal that broke our laws will get hired? The liberal thinking in this country is amazing. Why would they be able to buy a home when they have no credit history? Do you honestly believe they will purchase insurance on cars that they are driving in this country now, just because they suddenly got legal? Why bother to obey any laws when our own government turns a blind eye to illegal immigrants?

February 04 2013 at 11:37 AM Report abuse -2 rate up rate down Reply