U.S. manufacturing orders disappoint

Orders for U.S. durable goods rose by a slim 0.3 per cent in December, the Commerce Department reported Thursday.

But the increase fell far short of two per cent gain that many economists had forecast.

Orders to factories for big-ticket manufactured goods are closely watched as a sign of the strength of the economic recovery.

For the whole year, orders plunged by 20.2 per cent, compared with 2008 — the largest drop on records that go back to 1992.

Millan Mulraine, Economics Strategist at TD Securities, described the December number as "disappointing" after a 2.1 per cent increase the month before. When more volatile categories of goods, such as transportation products, are stripped out, he said, the increase was 2.1 per cent.

"Despite the disappointing headline print, the surge in core capital orders was encouraging, and the recent momentum in shipments suggests that capital expenditures in the U.S. are slowly gaining some positive momentum as businesses position their firms to take advantage of the recovery in demand," he wrote in a commentary.

"Notwithstanding this, with the U.S. economic recovery continuing to be quite moderate, compared to previous recoveries following deep recessions," said Mulraine, "we expect any future gains in capital orders to be modest."