U.S. factory orders and shipments increased in December, adding hope the worst of the economic recession may be over.

Tuesday morning the U.S. Commerce Department reported a 1.2% increase in factory orders during December, following a 4.3% drop in November. The increase is the second in the past three months. Also, factory shipments increased 0.6% in December following a 1.2% November decrease.
For all of 2001, factory orders fell 8.2% from the year before, while factory shipments dropped 5.4% during the same period.
“Everything is moving in the right direction in the first full monthly data not distorted by the September crash and October rebound," said Newport Communications Senior Economist Jim Haughey.
“The best news is that the inventory sales ratio has fallen to 1.37, only slightly above the apparent equilibrium ratio of 1.33 to 1.34 ratio in late 1999 and early 2000. This suggests that inventory absorption may be completed by February.”
Orders for manufactured durable goods in December increased 1.7%. Transportation equipment posted the largest increase, moving up 3.6%, mostly due to military and space equipment and parts. Computers and electronic parts, led by semiconductors, increased 3.1%, the third consecutive monthly increase.
Shipments of durable goods in December increased 0.5%. Shipments of transportation equipment, up three consecutive months, were up 1.7%. Computers and electronic products were also up for the third consecutive month, increasing 1.9%. Shipments of machinery fell 1.7%. while shipments of non-durable goods increased 0.6% for the month.