Factory Orders Rise Again, Gauge of Future Business Spending Jumps

- Factory Orders for December rose 2.3% versus estimates of a 2.5% gain and an upwardly revised 1.7% gain in November.

BOTTOM LINE: Orders to US factories rose in December by the most since July, indicating business spending on new equipment is accelerating, Bloomberg reported. The 2.3% gain is the fourth consecutive increase and follows a revised 1.7% rise the prior month. The increase in factory orders was led by a 5% surge in demand for durable goods, such as airplanes and computers. Orders for non-defense capital goods excluding aircraft, a gauge for future business spending, jumped 4.5% versus a .1% decline the prior month. Computer orders rose 4.6% in December and machinery orders jumped 7.3%, the most since December 2006. Factories had enough goods on hand to last 1.24 months, up from the record 1.22 months set in November. I continue to believe manufacturing will help keep the overall US economy growing as companies rebuild depleted inventories from booming exports.