WASHINGTON -- U.S. manufacturers' shipments rose and inventories fell in December, the government said yesterday.
Analysts said manufacturers have enough orders on hand to keep factories busy for months to come.
Factory orders rose 1.2 percent in December when the volatile category of aircraft and parts is excluded, the strongest rise since April. That followed a 0.6 percent decline in November, Commerce Department figures showed. Shipments rose for the first time since September.
Manufacturers' inventories also declined in December for the first time in a year, a sign factories aren't saddled with warehouses full of unsold goods.
Coupled with reports from U.S. retailers of stronger than expected sales in January, "You have a very healthy picture here," said William Sullivan, an economist at Dean Witter Securities in New York.
While U.S. businesses are bracing for an expected decline in export orders from Asia, "We entered 1998 with lean inventories," Sullivan said. "There simply is no overhang."
Overall factory orders, including aircraft, fell 2.5 percent in December after rising 2.4 percent a month earlier, the Commerce Department said. Still, analysts said a one-month falloff in aircraft orders isn't a major concern because Boeing Co., the nation's largest maker of jetliners, is working feverishly to deal with a three-year backlog in demand.
For all of last year, factory orders rose 5.3 percent after rising 4.6 percent in 1996 and advancing 7.4 percent in 1995.
Also yesterday, the Labor Department said first-time claims for state unemployment benefits rose a smaller-than-expected 3,000 last week to 303,000 after falling by 27,000 the previous week.
The four-week moving average for initial claims, considered a less volatile gauge of labor markets, also declined last week.
The factory orders report suggests the U.S. economy isn't going to buckle under the weight of the turmoil in the Pacific Rim -- and that its foundation remains sturdy.
Two of the most important signals of growth -- orders and shipments for industrial equipment, the machinery that makes the products we buy -- both gained in December, said Diane Swonk, deputy chief economist at First Chicago NBD.
December industrial equipment orders rose 1.6 percent, after declining 1.6 percent in November, a sign manufacturers expect production to remain steady, Swonk said.
Industrial equipment shipments rose 3.9 percent in December after a 2.2 percent decline the previous month -- suggesting that manufacturers aren't looking for any slowdown in the immediate future, she said.