WASHINGTON (Reuters) - New orders for U.S.-made goods rose just moderately in December, but a pick up is likely in the months ahead as unfilled orders continued to pile up.
Factory orders gained 0.2% after rebounding 2.6% in November, the Commerce Department's Census Bureau said on Friday. The increase was in line with economists' expectations. Orders increased 0.8% on a year-on-year basis in December.
Manufacturing, which accounts for 10.3% of the economy, is being constrained by high interest rates. The outlook is, however, promising.
The Federal Reserve left interest rates unchanged on Wednesday. Fed Chair Jerome Powell told reporters that rates had peaked and would move lower in coming months.
The Institute for Supply Management's manufacturing PMI neared the recovery zone in January.
Civilian aircraft orders gained 0.4% in December after soaring 84.1% in November, while orders for motor vehicles, parts and trailers increased 0.9%. There were also increases in orders for primary metals, computers and electronic products as well as electrical equipment, appliances and components.
Shipments of manufactured goods were unchanged. Manufactured goods inventories edged up 0.1%, while unfilled orders increased 1.3% after rising by the same margin in November.
The government also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 0.2% instead of 0.3% as estimated last month.
Shipments of these so-called core capital goods were unchanged instead of edging up 0.1% as previously reported. Business spending on equipment rebounded slightly in the fourth quarter.