updated 1/26/2006 12:08:15 PM ET 2006-01-26T17:08:15

Orders to American factories for big-ticket manufactured goods posted a third consecutive increase in December, closing out a record year for the nation’s factories.

Major Market Indices

The Commerce Department reported that orders for durable goods rose by 1.3 percent in December to $228.1 billion as demand for military aircraft, machinery and autos all posted strong gains.

For all of 2005, orders increased by 8.2 percent to an all-time high of $2.51 trillion. Orders for durable goods had risen by 10 percent in 2004 and 4.2 percent in 2003 after posting declines in 2002 and 2001, the year the country was in recession.

In other economic news, the Labor Department reported that the number of Americans filing new claims for unemployment benefits rose to 283,000. That was up by 11,000 from the previous week. However, the four-week moving average for claims dropped to 288,750, the lowest level since July 2000.

The 1.3 percent increase in orders for durable goods, items expected to last at least three years, followed even stronger gains of 5.4 percent in November, a month when demand for commercial aircraft had soared, and 3.1 percent in October.

In December, the strength was led by a 6.5 percent jump in demand for machinery. Transportation posted a solid gain of 1.9 percent as demand for new cars and trucks shot up by 6.6 percent following declines in October and September as automakers struggled to trim an overhang of unsold cars.

Orders for commercial aircraft, a very volatile category, fell by 8.1 percent in December, but that decline followed huge gains of 139.3 percent in November and 51.6 percent in October.

Excluding transportation, orders rose by 0.9 percent, compared to a 0.6 percent gain in November. It was the best showing in this category since a 5.1 percent jump last August.

The category that covers non-defense capital goods excluding aircraft was up by a strong 3.5 percent in December following much smaller gains in November and October, indicating that businesses are boosting their investment plans.

Analysts are looking for manufacturing to be a source of strength this year, spurred by increased investment by businesses to expand and modernize their operations.

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