New orders at U.S. factories rose 1.1 percent in November in their third straight increase and inventories grew for the second month in a row, according to government data released on Tuesday that showed continuing recovery in manufacturing.
Analysts polled by Reuters had expected a much slimmer increase in orders of 0.5 percent. The gain in factory orders for October was also revised up to 0.8 percent from the 0.6 percent previously reported.
Inventories rose 0.2 percent in November, following a 0.6 percent increase in October, originally reported as 0.4 percent.
Stocks at factories had been shrinking for more than a year prior to October and the current growing supply indicates factories are ramping up production as the U.S. economy begins growing again.
The inventories-to-shipment ratio, a measure of how long it would take to deplete current stocks, dropped to 1.32 months' worth from October's 1.34 months'.
(Reporting by Lisa Lambert, Editing by Andrea Ricci)