Updated March 24 at 1:24pm

Orders to U.S. factories rose less than forecast in December


Orders placed with U.S. factories increased less than forecast in December, reflecting a drop in non-durable goods that partly countered gains in construction equipment and computers.

Bookings climbed 1.8 percent after a revised 0.3 percent drop in November that was initially reported as unchanged, figures from the Commerce Department showed today in Washington. The Bloomberg survey median called for a 2.3 percent gain. Demand for durable goods increased 4.3 percent, little changed from a 4.6 percent gain estimated last week, while non-durables dropped 0.3 percent on declines in petroleum and tobacco.

A fourth-quarter pickup in consumer spending is spurring companies including automakers such as Chrysler Group LLC and Ford Motor Co., reviving a manufacturing industry that cooled in the second half of 2012. The acceleration extended into January, according to a gauge last week that showed factories expanded at the strongest pace in nine months.

“Manufacturing’s fine,” said Brian Jones, senior U.S. economist at Societe Generale in New York, who projected a 1.9 percent gain in orders. “The economy continues to improve.”

Estimates in the Bloomberg survey of 63 economists ranged from a drop of 0.3 percent to a 3 percent gain.

Job prospects

A measure of job prospects fell in January for the first time in four months as more Americans said jobs were harder to get, another report showed. The Conference Board’s Employment Trends Index decreased 0.1 percent to 109.38 from the prior month’s revised reading of 109.47, the New York-based private research group said. The measure increased 2.7 percent from January 2012.

Stocks fell, after the Standard & Poor’s 500 Index jumped to a five-year high, on concern over increasing political tension in Europe. The S&P 500 dropped 0.6 percent to 1,503.63 at 10:25 a.m. in New York.

Factory orders excluding the volatile transportation category increased 0.2 percent in December after falling 0.2 percent the previous month. Demand minus military hardware advanced 0.3 percent.

The jump in bookings for durable goods was paced by a 12.2 percent increase in construction equipment and a 6.4 percent gain for computers.

Non-durable goods

The drop in orders for non-durable goods, reported today for the first time, may have been influenced by swings in prices. Demand for petroleum and coal products fell 0.6 percent in December, while tobacco slumped 23.1 percent.

Demand for capital goods excluding aircraft and military equipment, and including items such as computers, engines and communications gear, fell 0.3 percent compared with the 0.2 percent increase the Commerce Department estimated in its Jan. 28 durable goods report. The increase for November was revised up to 3.3 percent from 3 percent.

Shipments of those goods, used in calculating gross domestic product, climbed 0.2 percent, about the same as the previously estimated 0.3 percent gain. Total shipments advanced 0.4 percent, keeping the inventory-to-sales ratio at 1.27 months.

Today’s updated figures will probably not alter the data issued by the Commerce Department last week. Business investment in equipment and software climbed at a 12.4 percent annual rate in the fourth quarter, the best performance in more than a year, according to last week’s report.

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