New orders at US factories rose 2.4 per cent in December at a higher-than-forecast rate, while inventories edged up, a government report showed today.
Analysts had expected factory orders to gain 1.8 per cent after November's revised 1.2 per cent rise, originally reported as a 0.9 per cent gain.
US manufacturing is being watched closely by the Federal Reserve
as it monitors the health of the economy to judge whether a cooling housing market has a broader-than-expected impact on growth.
On Wednesday the Fed held interest rates unchanged from June at 5.25 per cent and acknowledged recent signs of "somewhat firmer" economic growth and "tentative signs" the housing market was stabilising.
Factory orders have increased in three of the last four months. New orders in 2006 were 5.3 per cent above the previous year, the Commerce Department said. Excluding transportation, factory orders rose 2.2 per cent, the department said.
Non-defence capital goods orders excluding aircraft, seen as a good gauge of business spending, increased 3.1 per cent from a 1.0 per cent fall the previous month. Manufacturing shipments gained 1.4 per cent, accelerating from November's 0.2 per cent increase, while inventories were up 0.1 per cent.
A survey showed today that US consumer sentiment rose in January to its highest in two years on favourable expectations for the US economy and for higher wage gains.
The Reuters/University of Michigan Surveys of Consumers said the final January reading on the consumer sentiment index rose to 96.9 from 91.7 at the end of December.