WASHINGTON – U.S. factory orders (search) unexpectedly rose 0.2 percent in January on electrical equipment strength while a gauge of business spending also posted solid gains, a government report showed on Friday.
The rise in factory orders to a seasonally adjusted $380.53 billion defied Wall Street expectations for a 0.1 percent drop.
The Commerce Department (search) also revised up December's factory orders to a 0.5 percent rise from an originally reported 0.3 percent gain. Meanwhile, January orders for durable goods — those intended to last for three years or more — were revised to a 1.3 percent fall from a smaller 0.9 percent decline.
Nondefense capital goods excluding aircraft, seen by economists as a measure of business spending strength, rose 2.9 percent in January after an upwardly revised 3.4 percent climb in December.
Transportation orders, the largest single component in factory business, fell 5.4 percent in the month after a 2.3 percent decline in December.
The weakness was offset by a 12.3 percent jump in orders for electrical equipment, appliances and components — the sector's largest advance since September 1997.
Excluding transportation, factory orders rose 1.1 percent in January.
Total inventories jumped a record 1.3 percent in January while durable goods inventories also rose a record 1.2 percent.
The inventories-to-shipments ratio was unchanged at 1.23 in January.
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