New orders at US factories in January posted the largest drop since 2000 as aircraft orders fell, while pending sales of US homes slipped as the housing market slowed, reports showed on Monday.
Factory orders fell 4.5 percent in January, slightly less than expected but still the biggest drop since July 2000, as orders for durables, machinery, computers, and aircraft fell, a Commerce Department report showed.
Analysts polled by Reuters were expecting factory orders to fall 5.3 percent.
Orders for durable goods, expensive items meant to last three years or more, fell 9.9 percent, the steepest decline since a 14.2 percent drop in July 2000. However, the decline in durables was revised up from a 10.2 percent drop reported February 24.
Stock market reaction was mixed while US Treasury debt prices and the dollar were little changed on the news.
"We had already seen the big retreat in durables orders, so most of the news had been taken out earlier. The Fed will look past the see-saw numbers on things like orders and look at the broader trend, which is still for a fairly strong first-quarter economic performance," said Avery Shenfeld, an economist for CIBC World Markets in Toronto.
Factory orders for December were revised up to a 1.6 percent rise from an initially reported 1.1 percent gain.
Transportation equipment tumbled 31.0 percent as orders for nondefense aircraft and parts plummeted 68.3 percent. Civilian aircraft orders had slipped 2.8 percent in December but that followed a 139.4 percent surge in November.
When transportation orders were stripped out, factory orders were up 1.6 percent in January, the third consecutive monthly increase. Meanwhile, when defence orders were omitted, factory orders fell 3.3 percent, the first decline in four months and the biggest slide since September 2001.
Nondefense capital goods excluding aircraft, a proxy for business spending, rose 0.1 percent.
Machinery orders slid 2.4 percent in January, while computers and electronic products orders were down 0.4 percent on a 13.7 percent drop in computer orders.
A separate report showed pending sales of US homes slipped in January, according to trade group data, extending a months-long slide as the housing market shows signs of moderation after a five-year rally.
Comments
Comments are closed.