U.S. Factory Orders Drop in January
Orders for goods coming out of American factories recorded their biggest decline in six months in January and business spending on equipment appeared to be slowing after strong growth in 2017.
Figures released Tuesday by the U.S. Commerce Department revealed that factory goods orders dropped 1.4% amid a broad decrease in demand, the largest drop since July 2017 and ended five straight months of increases.
December's report was revised to show orders rising 1.8% instead of the previously reported 1.7% increase.
Orders for transportation equipment dropped 10 percent, weighed down by a 28.4 percent plunge in the volatile orders for civilian aircraft.
Economists had forecast factory orders decreasing 1.3% in January. Orders surged 8.4% on a year-on-year basis.
Orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans, fell 0.3% in January instead of declining 0.2% as reported last month. Orders for so-called core capital goods decreased 0.5% in December.
That was the first back-to-back drop since May 2016. Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, slipped 0.1% in January instead of edging up 0.1% as reported last month.
Core capital goods shipments increased 0.7% in December. Business spending on equipment is cooling after growing by a robust 4.8% in 2017.
But it is likely to remain supported as companies are expected to use some of their windfall from a $1.5-trillion tax cut package to buy machinery and other equipment as they seek to boost sluggish productivity.