©Reuters. FILE PHOTO: A worker stands near smokestacks at a factory near IceStone, a manufacturer of recycled glass countertops and surfaces, in New York City, New York, U.S., June 3, 2021. REUTERS/Andrew Kelly/File Photo
WASHINGTON (Reuters) – New orders for U.S. manufactured goods rose only moderately in December, but a recovery is likely in coming months as unfilled orders continue to pile up.
Factory orders rose 0.2% after rebounding 2.6% in November, the Commerce Department’s Census Bureau said Friday. The increase was in line with economists’ expectations. Orders increased 0.8% year-on-year in December.
The manufacturing sector, which represents 10.3% of the economy, is limited by high interest rates. However, the prospects are promising.
The Federal Reserve left interest rates unchanged on Wednesday. Fed Chair Jerome Powell told reporters that rates had peaked and would fall in the coming months.
The Institute for Supply Management’s manufacturing PMI approached the recovery zone in January.
Civil aircraft orders rose 0.4% in December after surging 84.1% in November, while orders for motor vehicles, parts and trailers rose 0.9%. Orders for primary metals, computers and electronic products, as well as equipment, appliances and electrical components also increased.
Artifact shipments remained unchanged. Inventories of manufactured goods rose 0.1%, while unfilled orders rose 1.3% after rising by the same margin in November.
The government also reported that orders of non-defense capital goods, excluding aircraft, which are seen as a measure of corporate spending plans for equipment, rose 0.2% instead of the 0.3% estimated on last month.
Shipments of these so-called key capital goods remained unchanged instead of increasing 0.1% as previously reported. Business spending on equipment recovered slightly in the fourth quarter.