U.S. orders for manufactured goods rose in December, boosted by transportation and military equipment, the government said Tuesday in a report which added to signs that the worst of the recession may be past.

The Commerce Department said factory orders rose 1.2 percent in December to a seasonally adjusted $322.2 billion after a revised 4.3 percent decline in November. The latest increase was roughly in line with the 1.1 percent gain forecast by economists in a Reuters poll and was the second increase in the last three months.

Despite the latest gain, factory orders for the complete year were well below levels seen in the previous year. Orders fell 8.5 percent in 2001 on a year-over-year basis, the largest decline on record since comparable records began in 1992.

Increases were spread across the report as orders for long-lasting durable goods rose 1.7 percent in December to a seasonally adjusted $175.9 billion after a 6.1 percent decline in November.

Within the durables category, transportation equipment enjoyed the largest gains, rising 3.6 percent to a seasonally adjusted $49.8 billion due mainly to increased orders for missiles, space vehicles and parts.