Factory Orders Up 1.2% in November

New orders received by U.S. factories grew at the fastest pace in four months in November, helped by strong demand for new commercial aircraft and computers, the Commerce Department said Tuesday.

The value of new orders climbed 1.2% -- well ahead of expectations for a 0.8% rise -- to a seasonally adjusted $377.42 billion after an upwardly revised 0.9% gain in October.

The data added to other signs that U.S. manufacturers wrapped up 2004 on a relatively healthy note, including the Institute for Supply Management’s report Monday showing its index of manufacturing activity moved higher in December.

Economist Gary Thayer of A.G. Edwards & Sons Inc. in St. Louis said that the economy appeared to be “still doing quite well� and that business optimism was buoyant.

“Orders have continued to trend upward, not quite as fast as they were a year ago but continuing to rise,� he said.

Although overall orders rose, demand was mixed. Machinery orders fell 5.1%, but computer orders were up 6.4%.

The Commerce Department said transportation orders -- the largest component in factory business -- rose 8.8% in November after a 0.1% October gain.

It was the strongest rise in transportation orders since an 11% gain in February.

Civilian aircraft and parts orders -- which tend to come in large dollar totals but on an irregular basis because aircraft are so expensive -- shot up 64.2% to $9.59 billion after a 5% October advance.

Excluding transportation, factory orders were flat in November after rising 1% in October.

Shipments of finished goods, a gauge of how busy factories are at the moment, grew 0.4% to $379.03 billion in November on top of a 1.6% increase in October.

Separately, two reports showed retail business picked up at the end of December as shoppers sought bargains and markdowns.

Redbook Research reported that chain-store sales rose 5.2% on a year-over-year basis last week.

Another report, from the International Council of Shopping Centers and UBS, found that sales were up 4.6% during the same week on a year-over-year basis.