Factory Orders Tick Up in January
[Stay on top of transportation news: Get TTNews in your inbox.]
Orders placed with U.S. factories for business equipment barely rose in January after falling the prior month, suggesting firms are restraining their investment amid an uncertain outlook.
The value of core capital goods orders, a proxy for investment in equipment that excludes aircraft and military hardware, increased 0.1% last month after a downwardly revised 0.6% drop in December, Commerce Department figures showed Feb. 27. The data isn’t adjusted for inflation.
Bookings for all durable goods — items meant to last at least three years — sank 6.1%, the most since April 2020 as commercial aircraft orders plunged following a near-miss accident involving a Boeing Co. plane. Excluding transportation equipment, orders fell 0.3%.
Though many businesses are still committed to making long-term investments, soaring borrowing costs and demand concerns are leading many firms to dial back expansion plans early in the year. That suggests factory production may struggle to sustainably rebound in the coming months.
Core capital goods shipments, a figure that is used to help calculate equipment investment in the government’s gross domestic product report, climbed 0.8%, the most in a year. The first estimate of first-quarter GDP is due in late April, but it could be delayed should lawmakers fail to avert a government shutdown.
The Commerce Department’s report showed bookings for commercial aircraft, which are volatile from month to month, plummeted nearly 60%, the most since June 2020.
Want more news? Listen to today's daily briefing above or go here for more info
Boeing reported only three orders in January, the fewest in more than three years after a near-catastrophic accident early in the month led regulators to ground some of its planes. While often helpful to compare the two, aircraft orders are volatile and the government data doesn’t always correlate with the planemaker’s monthly figures.
While the manufacturing sector had been contracting for over a year, recent reports are suggesting it might be turning a corner. Data out last week showed factory activity expanded in February at the fastest pace since 2022 amid a pickup in demand.
