WASHINGTON -- New orders to the nation's factories showed a small but 'encouraging' rise of 0.2 percent in November -- the first increase since July -- the Commerce Department said Thursday.
Along with other recent reports, the increase could mean the recession is slowing. But most economists still expect some hard times ahead, including a further rise in unemployment.
Orders for manufactured goods rose $400 million in November to a seasonally adjusted $159.4 billion.
Robert Ortner, the department's chief economist, called the report 'encouraging' and said the 'severity of the recession may be moderating.'
The increase appeared largely due to a rise in orders for capital goods.
Orders for defense capital goods -- military equipment -- rose by $1 billion, or 26 percent, to $4.8 billion. Orders for nondefense capital goods -- equipment for industry -- rose 10 percent to $23 billion.
'In my view a turnaround in capital spending is the thing we really need to get this economy on the road to good health again,' said Ortner.
Orders for household durable goods -- such as major appliances - increased 0.8 percent to $4.8 billion, after an 11 percent decline the month before.
Ortner said the administration still hopes the economy will begin to turn around by springtime.
Both government and private economists, however, have cautioned that unemployment could rise further from its level of 8.4 percent in November, possibly to around 9 percent.
Unemployment -- the standard by which the average American usually perceives a recession -- frequently continues to rise after the pace of business activity starts to turn around. One reason is that employers do not rehire until they are sure business will improve.
Factory shipments of manufactured goods declined for the fifth straight month in November, down 1.4 percent to $161.9 billion. The backlog of unfilled orders fell 0.8 percent to $321.1 billion.
The book value of manufacturers' inventories -- unsold goods - increased $1.1 billion, or 0.4 percent, in November to $279.6 billion.
