WASHINGTON – U.S. factories orders climbed in November, led by a surge in aircraft demand. And businesses stepped up spending on machinery, computers and other long-lasting goods, a sign of investment that could fuel economic growth.
Factory orders rose 1.8 percent in November, the Commerce Department said Monday. That follows a 0.5 percent decrease in October.
Orders received by manufacturers totaled a seasonally adjusted $497.8 billion in November, the highest level on records dating to 1992. Orders have increased 2.5 percent over the past 12 months.
The improvements could signal accelerating growth in 2014. Americans are buying more cars and homes, increasing demand for steel, furniture and other goods. That has led factories to hire more workers, generating additional economic momentum.
Still, overall economic growth remains modest by historical standards. And though factory orders have strengthened in recent months, their growth rate has slowed during the recovery from the 2008 financial crisis.
A 21.8 percent jump in volatile aircraft orders drove the November gains. But orders rose in many other categories, a sign of strength at factories and confidence among companies.
Core capital goods, a proxy for business investment, rose 1 percent. Economists watch this category because it excludes volatile orders for aircraft and defense equipment.
Demand also rose for construction machinery, computers, communications equipment, furniture and motor vehicle parts.
Most of the gains occurred in long-lasting goods, which increased 3.4 percent in November. Orders for nondurable goods such as food products, clothing and paper rose a modest 0.3 percent.
Separate economic reports indicate that manufacturing has remained strong and could drive further growth.
Factory activity in December remained near a 2½-year high, according to the Institute for Supply Management. The trade group said last week that its index of manufacturing activity slipped to 57 in from 57.3 in November. That's still the second-highest reading since April 2011. And any reading above 50 signals growth.
Manufacturers have also bolstered hiring in recent months. Factories added 66,000 jobs from July through November, according to government's employment reports. The government releases its December employment report on Friday.