Durable Goods Orders Drop January

Washington, DC, February 27, 2007--Orders for durable goods dropped 7.8% in January as nearly every category of manufactured goods declined, the Commerce Department reported Tuesday.

The drop was exceeded the 5.5% drop expected by economists surveyed by MarketWatch. See Economic Calendar. Orders in December rose a revised 2.8%, down from 2.9% previously reported.

Analysts expected the headline number would be knocked down in January because Boeing Co. had a large drop in orders in January compared with December. Aircraft orders are very volatile.

Indeed, transportation orders fell 18% in January after rising 3.1% in December. Aircraft orders fell 60.3% in January

But the weakness in January durable goods orders extended well beyond the aircraft sector. Orders excluding transportation fell 3.1% in January. This is the third drop in the past four months.

Orders for core capital equipment, the kind of goods producers invest in to build their productive capacity - fell 6.0% in January, the biggest drop since January 2004. Shipments of core capital goods fell 2.7%.

Defense capital-goods rose 10.7% in January.

Shipments of durable goods rose 0.2% in January after rising 0.5% in the previous month.

Excluding transportation orders, shipments rose 0.9% after a 0.4% fall in December.

Unfilled orders rose 0.1% after rising 2.2% in December.

Inventories rose 0.3% after rising 0.7% in the previous month.

Looking at individual sectors, orders for machinery fell 9.3% in January. Shipments of machinery fell 6%.

Orders for computers and electronics other than semiconductors fell 7.8%. Shipments of computers rose 10.8%.

Orders for primary metals fell 1.5% in January. Shipments of primary metals fell 0.7%.