February 28, 2014 in Business

Orders for U.S. durable goods slow in January

Josh Boak Associated Press
 

WASHINGTON – American businesses ordered fewer durable manufactured goods in January, cutting demand for planes, autos and machines. But a key category that reflects business investment rebounded on the strength of demand for electronics and fabricated metals.

The Commerce Department said Thursday that orders for durable goods fell a seasonally adjusted 1 percent in January from December. Much of the decline was driven by a 20.2 percent drop in demand for commercial aircraft, a volatile month-to-month category. Orders for all transportation-related equipment fell 5.6 percent.

More encouragingly, orders rose 1.7 percent in a closely watched category, known as core capital goods, which excludes volatile transportation and defense orders. This category had dropped 1.8 percent in December.

Economists track this category to determine whether business investment is expanding. Last month’s rebound nearly erased all of December’s decline, a sign that companies might be anticipating more business during spring.

Manufacturers made fewer cars and trucks, appliances, furniture and carpeting in January, as cold weather delayed shipments of raw materials and caused some factories to shut down, the Federal Reserve has reported. Factory production plummeted 0.8 percent last month, ending five straight months of gains.

The Institute for Supply Management, a trade group of purchasing managers, said its index of manufacturing activity fell to 51.3 in January, from 56.5 in December. It was the lowest reading since May, though any reading above 50 signals growth in manufacturing.

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