UPDATE 1-US March factory orders surprise with strength

(Adds details from report)

WASHINGTON, May 2 (Reuters) - New orders at U.S. factories jumped a much stronger-than-expected 1.4 percent in March as demand for long-lasting goods edged up and orders for other items surged, a government report showed on Friday.

The Commerce Department said orders for durable goods, items intended to last three years or longer, rose a revised 0.1 percent. Last week, it said they fell 0.3 percent.

Demand for nondurable goods, such as food and petroleum products, shot up 2.6 percent in March, reversing February's decline.

Wall Street economists had expected factory orders to increase only 0.2 percent. In February, orders dropped 0.9 percent, not as sharply as previously reported.

A 3.2 percent drop in orders for transportation goods weighed on overall demand growth. With the volatile transportation component stripped out, factory orders were up an even healthier 2.2 percent in March after a 1.5 percent decline in February.

Inventories of manufactured goods continued to swell in March, rising 0.9 percent to the highest level since the Commerce Department began keeping records in 1992. Inventories increased in 13 of the preceding 14 months.

However, shipments of factory goods rose a solid 1.1 percent in March and the inventories-to-shipments ratio, which offers a gauge of whether businesses are overstocked, held steady at a slim 1.27. (Reporting by Lisa Lambert; Editing by Dan Grebler)