Factory orders rise by 1.2 percent in November
WASHINGTON — America’s factories saw orders go up by a strong 1.2 percent in November, the biggest advance in four months and a sign that the nation’s manufacturing sector was gaining momentum as the new year loomed.
The latest snapshot of manufacturing activity, released by the Commerce Department on Tuesday, was even better than the 0.8 percent rise some economists were forecasting. The 1.2 percent increase, the most since July, followed a solid 0.9 percent gain in October.
Tuesday’s report, along with one released on Monday, suggested the industrial sector — hardest hit by the 2001 recession — continues to gain ground and cement its recovery.
The Institute for Supply Management reported Monday that manufacturing activity grew solidly in December, ending 2004 on a high note.
“No one can dispute the fact that manufacturing enjoyed a very good year in 2004,” said Ken Mayland, president of ClearView Economics.
On Wall Street, though, the newest manufacturing report failed to inspire investors, who were rattled by inflation concerns raised by Federal Reserve policy-makers. The Dow Jones industrials lost 98.65 points to close at 10,630.78.
Those concerns were revealed in minutes, released Tuesday, of the Fed’s Dec. 14 meeting. The Fed suggested that short-term rates will need to move higher to blunt the risk of inflation. Financial markets interpreted the Fed’s comments as a hint of more aggressive rate increases in the future. But economists believe the Fed probably will stay on a path of moderate rate hikes.
Tuesday’s report showed that orders for big-ticket manufactured goods in November rose by 1.4 percent, a turnaround from the 1 percent drop registered in October. Orders for automobiles, household appliances, computers and primary metals, including steel, all showed gains in November.
Orders for nondurable goods, meanwhile, rose by 1 percent in November, following a 3.1 percent increase in the previous month. November’s good showing in nondurable bookings reflected increases in orders for food products, chemicals and paper products.