Orders for U.S. Manufactured Goods at 3 Year Low

Demand for goods manufactured in the U.S. fell in January to it’s lowest in three years.

Durable goods orders dropped 4.0 percent, the largest such drop since January 2009 when the country was still stuck in a deep recession, which many analysts claim is over, according to Commerce Department data on Tuesday.

“What we are seeing is that that the buildup of inventory that made third quarter GDP so strong is beginning to crest. We are seeing a slowdown in domestic demand for equipment and also slower overseas demand,” said Christopher Low, chief economist for FTN Financial.

“Also significant is the tax break on capital investment in 2011 is no longer there in 2012,” Low said.

Economists more than missed the mark with predictions that orders would only fall by 1.0 percent.

Durable goods range anywhere from toasters to big-ticket items like aircraft which are meant to last three years and more. Excluding transportation, orders fell 3.2 percent. Economists had expected that reading to be flat.

Machinery orders dropped 10.4 percent which is also the highest since January 2009.

Non-defense capital goods orders excluding aircraft saw it’s biggest drop in a year, by4.5 percent.

Boeing received 150 orders for aircraft during the month, down from 287 in December, according to the companies website.

Orders for motor vehicles edged up 0.9 percent.

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

 

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