U.S. factory orders increase for second straight month

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A rack of SUV doors sit on a cart at the General Motors Assembly Plant in Arlington, Texas June 9, 2015. REUTERS/Mike Stone/File Photo (Copyright Reuters 2017)

- New orders for U.S.-made goods increased for a second straight month in January, suggesting the manufacturing sector recovery was gaining momentum as rising prices for commodities spur demand for machinery.

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Factory goods orders rose 1.2 percent, the Commerce Department said on Monday after an unrevised 1.3 percent jump in December. Economists polled by Reuters had forecast factory orders advancing 1.0 percent in January.

Factory orders were up 5.5 percent from a year ago. Total shipments of manufactured goods increased 0.2 percent after surging 2.5 percent in December.

Manufacturing, which accounts for about 12 percent of the U.S. economy, is regaining its footing after being buffeted by lower oil prices, a strong dollar and an inventory overhang.

The nascent recovery was underscored by a survey last week showing a gauge of national factory activity jumped to a 2-1/2-year high in February.

The Commerce Department also said orders for non-defense capital goods excluding aircraft - seen as a measure of business confidence and spending plans - slipped 0.1 percent in January instead of the 0.4 percent drop reported last month.

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Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the gross domestic product report, fell 0.4 percent in January. They were previously reported to have declined 0.6 percent.

The weakness in shipments points to continued sluggish growth in business spending on equipment, which increased at a 1.9 percent annualized rate in the fourth quarter. That was the first rise in over a year.

In January, orders for transportation equipment accelerated 6.2 percent, reflecting a 62.2 percent surge in defense aircraft orders. There was also a 69.8 percent jump in orders for civilian aircraft. Outside transportation, orders for machinery increased 0.9 percent.

Orders for computers and electronic products fell 1.9 percent and bookings for electrical equipment, appliances and components declined 2.6 percent. Orders for fabricated metal product rose 2.3 percent.

(Reporting by Lucia Mutikani; Editing by Paul Simao)