By Courtney Schlisserman Feb. 4 (Bloomberg) -- Orders placed with U.S. factories increased more than anticipated in December, boosted by investment in business equipment that may help power the economy in coming months. Bookings rose 1 percent, matching the revised gain in November and the fourth straight increase, figures from the Commerce Department showed today in Washington. Excluding transportation, orders increased 1.2 percent. Manufacturers will probably keep boosting production to limit further declines in inventories after a record drawdown last year. Computer disk drive-maker Seagate Technologies is among companies reporting stronger demand that may begin to generate confidence in the recovery. “We’re starting to see some real traction in terms of orders and shipments,” Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut, said before the report. “We’ve turned the corner. We stabilized in the third quarter and started to grow in the fourth and that is something we’re going to see continue this year.” Economists forecast a 0.5 percent rise in orders after a previously reported 0.6 percent gain for November, according to the median of 66 projections in a Bloomberg News survey. Estimates ranged from a drop of 0.6 percent to a 3 percent jump. Orders for durable goods, those meant to last several years, rose 1 percent. Last week, the government estimated they had climbed 0.3 percent for December. Bookings for capital goods excluding aircraft and military equipment, a measure of future business investment, increased 2.2 percent after a 3.2 percent jump. Shipments of those goods, used to calculate gross domestic product, rose 2.1 percent. Business Investment The economy expanded at a 5.7 percent pace in the fourth quarter, the fastest pace in six years, Commerce Department data released Jan. 29 showed. Purchases of equipment and software increased at a 13 percent pace, the most since 2006. Orders for non-durable goods, which include food, petroleum and chemicals, increased 1 percent in December after a 2.2 percent jump the prior month. The gain in December reflected more sales of food, paper products, chemicals and petroleum. Today’s report also showed factory inventories fell 0.1 percent. Manufacturers had enough goods on hand to last 1.29 months at the current sales pace, the fewest since August 2008, Commerce Department officials said. Production gains that helped the economy recover from the deepest recession since the 1930s may encourage manufacturers to hire in coming months. Since reducing payrolls by 262,000 in January 2009, the most in 24 years, factory job cuts have slowed. Jobless Claims Figures from the Labor Department earlier today showed more Americans unexpectedly filed first-time jobless claims last week, indicating labor market improvement will be halting. New claims for unemployment insurance rose to 480,000, the highest level in seven weeks, from 472,000. A report tomorrow from the Labor Department is forecast to show a 20,000 decline in factory employment, the smallest drop since the recession started in December 2007, according to the median estimate in a Bloomberg survey. Figures this week from the Institute for Supply Management showed manufacturing in January expanded at the fastest pace in five years as production and orders accelerated. Seagate Technology, the world’s largest maker of hard-disk drives, said it sold a record 49.9 million units, fueled by higher-than-anticipated demand for notebooks and desktop computers as sales rose 33 percent in the three months that ended Jan. 1. ‘More Confidence’ “As we get further and further away from the implosion we all felt at the end of 2008, you have more confidence that the signals you’re seeing are real,” Steve Luczo, chief executive officer, said in an interview on Jan. 21. Seagate is based in the Cayman Islands and operated from Scotts Valley, California. General Electric Co., the world’s biggest maker of jet engines, locomotives and medical-imaging machines, said Jan. 22 that its backlog of equipment and service orders rose about $1 billion, to $175 billion in the fourth quarter. To contact the reporters on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net

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