Durable goods orders were better than expected in January, the Commerce Department said on Wednesday, adding further evidence that the manufacturing sector is recovering after a months-long slump.

Orders for goods designed to last three or more years rose 2.6% in January. Analysts were expecting a 1.6% gain, according to a Reuters poll. The results in January follow a 0.9% increase in December, but a 6% decrease in November. Still, durable goods orders rose for the third time in the last four months.

The largest gains were in transportation orders, which were up $5.4 billion, or 9.3%, to $52.4 billion, as a result of demand for motor vehicles and aircraft. Excluding transportation, new orders rose 1.3%

Economists cheered the breadth of improvement in orders. "You saw a fairly broad-based increase in new orders and shipments," said Paul Kasriel, an economist at Northern Trust. " This should be a factor leading to an increase in industrial production in the first quarter.

Nondefense capital goods orders, a gauge of business investment, were up 0.5% in January. "Business investment in equipment and software will likely stabilize by spring and rise modestly in the second half of the year," Peter Kretzmer, an economist at Bank of America, predicted in a report.

Orders for high-technology goods were also strong, as semiconductor orders jumped 14.2%. Any rebound in technology orders is a plus, because the glut of capacity in the tech sector contributed to a sharp slowdown in manufacturing, which factored into the recession most experts now agree started last March.

Durable goods shipments rose 2.9% in January, following a 0.8% gain in December. Unfilled orders decreased 1.3%, while durable goods inventories fell by 0.6%.

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