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Economists: Factory Orders Rose 2 Percent In January

Fri, 03/04/2011 - 3:32am

WASHINGTON (AP) — Businesses likely ordered more manufactured goods from U.S. factories in January, but much of the gain is expected to come from a sharp rise in volatile aircraft orders.

Economists expect factory orders rose 2 percent in January. The new report will be released at 10 a.m. EST Friday.

In December, factory orders increased to a seasonally adjusted $436 billion, a level that economists view as healthy. The December increase left orders 23.6 percent higher than in March 2009, the low point during the recession.

Even with a gain in overall orders, economists are bracing for sharp declines in many major categories. That's because a separate report last week showed businesses ordered fewer long-lasting factory goods in January, after excluding a big jump in demand for commercial aircraft. And a closely watched category that measures business demand for capital goods fell 6.9 percent — the biggest decline in two years — after rising in the previous two months.

The factory orders report is more comprehensive. It measures orders for durable goods and non-durable goods, items such as chemicals, paper and food.

And most economists viewed the weakness in January as temporary. They expect manufacturing to keep driving economic growth.

Earlier this week, the Institute for Supply Management said U.S. manufacturing activity expanding in February at the fastest pace in nearly seven years. Companies are benefiting from rising domestic demand and stronger export sales. A declining dollar has made American goods more competitive in foreign markets.

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