U.S. factory orders increase more than forecast in December

The U.S. Commerce Department reported on Tuesday that the value of new factory orders rose 1.8 percent m-o-m in December, following a revised 1.2 percent m-o-m decline in November (originally a 0.7 percent m-o-m drop). That marked the largest monthly gain since August 2018.

Economists had forecast a 1.2 percent m-o-m advance.

According to the report, orders for transportation equipment jumped 7.9 percent m-o-m in December (the biggest advance since August 2018) after an 8.2 percent m-o-m tumble in November. Meanwhile, machinery orders decreased 1.0 percent m-o-m after falling 1.2 percent m-o-m in November. Orders for electrical equipment, appliances and components 0.3 percent m-o-m.

Total factory orders excluding transportation, a volatile part of the overall reading, increased 0.6 percent m-o-m in December (compared to a downwardly revised 0.2 percent m-o-m growth in November), while orders for nondefense capital goods excluding aircraft, a measure of business spending plans, decreased 0.8 percent m-o-m (instead of dropping 0.9 percent m-o-m as reported last month). The report also showed that shipments of core capital goods reduced 0.3 percent m-o-m in December, rather than declining 0.4 percent m-o-m as previously reported.

In 2019, factory orders decreased 0.6 percent y-o-y.