New orders for U.S. factory goods fell for a fifth straight month in December, but a smaller-than-previously reported drop in business spending plans supported views of a rebound in the months ahead.
The Commerce Department said on Tuesday new orders for manufactured goods declined 3.4 percent as demand fell across a broad sector of industries.
November's orders were revised to show a 1.7 percent drop instead of a previously reported 0.7 percent fall. Economists polled by Reuters had forecast new orders received by factories sliding 2.2 percent.
Manufacturing is slowing, constrained by weak global demand and falling crude oil prices, which have caused some companies in the energy sector to either delay or cut back on capital expenditure projects.
Read MoreUS growth cools in fourth quarter
Business spending on equipment in the fourth quarter was the weakest since mid-2009. The soft trend in business investment likely persisted early into the first quarter, with a report on Monday showing a manufacturing sector gauge falling in January.
Factory activity has also been hampered by an ongoing labor dispute at the nation's West Coast ports, which has caused shipment delays. But there is cautious optimism that firming domestic demand will limit the slowdown in manufacturing.
In December, factory orders excluding the volatile transportation category fell 2.3 percent, the biggest drop since March 2013, after declining 1.3 percent in November.
The Commerce Department also said orders for non-defense capital goods excluding aircraft—seen as a measure of business confidence and spending plans—slipped 0.1 percent instead of the 0.6 percent drop reported last month.
Overall orders for durable goods, manufactured products expected to last three years or more, fell 3.3 percent instead of the previously reported 3.4 percent decline.
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