General Motors Assembly Line

General Motors Assembly Line (Reuters)

Durable Goods Orders Take Biggest Drop in 3 Years

Politics Reuters

New orders for U.S. manufactured goods fell in January by the most in three years as demand fell across the board from machinery to aircraft, suggesting the economy started the year on weaker footing than expected. Durable goods orders dropped 4.0%, the biggest drop since January 2009 when the country was still mired in a deep recession, according to Commerce Department data on Tuesday.

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Economists had forecast orders falling 1.0%.

Durable goods range from toasters to big-ticket items like aircraft which are meant to last three years and more.

Excluding transportation, orders fell 3.2%. Economists had expected that reading to be flat. Machinery orders dropped 10.4%, the largest decline since January 2009.

 Non-defense capital goods orders excluding aircraft, a closely watched proxy for future business investment, fell 4.5%, the steepest drop in a year.

A 6.1 percent drop in bookings for transportation equipment - including a 19% fall in civilian aircraft orders - dragged on the overall reading for durable goods.

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Boeing received 150 orders for aircraft during the month, according to the plane maker's website, down from 287 in December.

Orders for motor vehicles edged up 0.9%.

Shipments of non-defense capital goods orders excluding aircraft, which go into the calculation of gross domestic product, fell 3.1% in January, the biggest decline since April 2009.

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