New orders received by factories unexpectedly rose in November, and orders excluding transportation recorded their largest gain in eight months, according to a government report on Tuesday that pointed to underlying strength in manufacturing.
The Commerce Department said orders for manufactured goods increased 0.7 percent after dropping by a revised 0.7 percent in October.
Economists polled by Reuters had forecast factory orders slipping 0.1 percent in November from a previously reported 0.9 percent decline in October. Orders have risen in four of the last five months and Tuesday's data was the latest to offer evidence the economic recovery was now firmly on a sustainable path.
Manufacturing has been the star performer during the recovery from the worst recession since the 1930s and continues to expand even as businesses are starting to pull back in rebuilding their inventories.
On Monday the Institute for Supply Management said its index of national factory activity climbed to a seven-month high in December , hoisted by sturdy gains in new orders and production.
The Commerce Department report showed orders excluding transportation increased 2.4 percent in November , the highest since March, after a 0.1 percent gain the prior month.
Unfilled orders at U.S. factories increased 0.6 percent in November after rising 0.7 percent the prior month. Shipments increased 0.8 percent, rising for a third consecutive month, while inventories gained 0.8 percent after rising 1.1 percent in October.
The department revised durable goods orders for November to show a much smaller 0.3 percent fall rather than the previously reported 1.3 drop. Excluding transportation, orders for durable goods increased a bigger 3.6 percent in November instead of 2.4 percent.
Orders for non-defense capital goods excluding aircraft, seen as a measure of business confidence, increased 2.6 percent after 3.2 percent decline in October.
(Reporting by Lucia Mutikani; Editing by Neil Stempleman)