US durable goods orders tumble

New orders for US-made durable goods fell by a much sharper-than-expected 7.8 percent in January as non-defence goods orders saw their biggest monthly decline ever, a government report showed on Tuesday. A steep drop in orders for Boeing Co airliners helped push down non-defence orders for durable goods, items meant to last three years or more.
Excluding volatile transportation orders, which are heavily skewed by aircraft, durable goods orders fell by 3.1 percent in January, their steepest drop since July 2005, the Commerce Department reported. That followed a downwardly revised gain of 2.8 percent in December.
Economists polled by Reuters had forecast that orders for durable goods would fall 2.5 percent, orders excluding transport would drop 0.2 percent and orders excluding defence goods would rise 0.3 percent.
Overall non-defence orders fell by a record 7.8 percent in January, while closely watched orders for non-defence capital goods, seen as a proxy for business spending, fell by a record 19.9 percent. Excluding aircraft, non-defence capital goods spending fell 6.0 percent, the largest drop since January 2004, when orders fell 8.1 percent.
Analysts said the lower-than-expected figure could help ease the Federal Reserve's concerns that a strengthening economy was contributing to inflation. Transportation orders fell by 18 percent, a figure affected heavily by a 60.3 percent drop in civilian aircraft orders. Boeing Co reported orders of just 13 planes in January, after a strong tally 212 in December.
Defence aircraft and parts orders also fell 54.6 percent. Automotive orders also fell 5.1 percent following a 5.3 percent rise in December. In a separate release, Redbook Research on Tuesday reported that US chain store sales rose 3.0 percent during the week ended February 24 compared with the same week a year earlier. Sales for February were down 1.2 percent compared with January, but up 2.8 percent from February 2006, according to the report.
CONSUMER CONFIDENCE RISES: US consumers' confidence improved more than expected in February on a more favourable view of the labour market, a survey showed on Tuesday. The Conference Board said its index of consumer sentiment edged up to 112.5 in February from January's slightly downwardly revised 110.2. Economists polled by Reuters on average had forecast a February reading of 108.9.
EXISTING HOME SALES UP: The pace of US existing home sales rose 3.0 percent in January, the biggest jump in two years, the National Association of Realtors said on Tuesday in a report that was much stronger than expected.