Washington, DC, Feb. 26--Durable goods orders tumbled in January amid the largest drop in transportation equipment demand since 2002.
Demand for longer lasting manufactured goods decreased 1.8% to $180.98 billion last month, the Commerce Department reported Thursday. But orders for December were revised sharply up to a 1.6% increase from the previously reported 0.3% gain.
Economists had expected a more modest 1.4% rise in January, according to economists surveyed by Dow Jones Newswires and CNBC.
The manufacturing sector has shown strength recently. The Federal Reserve said the nation's industrial production climbed in January as bad winter weather boosted utility output. Also, the central bank's New York district said manufacturing activity rose to a record in February.
Transportation orders declined by 10.4%, the biggest drop in the category since the 18.3% slide recorded in September 2002. December orders rose 1.4%.
Nondefense aircraft orders plunged 27.9% and defense aircraft demand plummeted 34%. Orders for cars and parts fell 5.1%. Excluding transportation overall durable orders rose by 2%.
Capital goods orders in January sank 0.6% after rising 3.9% a month earlier. Demand for defense related items tumbled 13.7%. Demand for nondefense capital goods, which are meant to last at least ten years and serve as a gauge for business spending, rose 1.5%.
Orders for computers and electronic products increased 7.1%. Machinery orders fell 1.9%. Demand for primary metals advanced 2.5%.
Durable goods inventories inched up 0.1%, unfilled orders dipped 0.1%, and shipments were flat.
