US Factory Orders Continue Downfall in January
New orders for US factory goods fell in January, as declining demand in transportation, primary metals and electronic equipment weighed on manufacturing activity.
US factory orders declined 0.7 percent in January, after falling at a revised rate of 2 percent the previous month, the Commerce Department reported today. The drop, which was bigger than expected, shows manufacturing activity cooled this winter.
New orders, down three of the last four months, fell $3.3 billion to $483 billion. Shipments declined for the third consecutive month at a pace of 0.3 percent. Durable goods, which declined 5.3 percent in December, fell 1 percent in January. Unfilled orders and inventories both increased, official data showed.
Excluding transportation equipment, new orders were up 0.2 percent.
The decline is partly attributable to unreasonably cold weather, which has weighed on economic activity ranging from home building to consumer spending. The ADP Institute on Wednesday said cold weather also weighed on hiring in February. Private US employers added 139,000 payrolls in February, following a revised rate of 127,000 the previous month. The Labor Department is scheduled to release official payroll figures Friday.
The US manufacturing sector rebounded in February, according to the Institute for Supply Management. Fourteen of the 18 manufacturing industries reported growth, with new orders rising for the ninth consecutive month. This suggests manufacturing activity may be rebounding after a prolonged battle with cold weather and heavy snowfall.
Economists believe the bad weather is likely to lead to disappointing GDP figures in the first quarter. According to Markit Group chief economist Chris Williamson, US GDP is headed for an annualized growth rate of just 1.7 percent in the first quarter.
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