Aircraft sales weigh on US durable goods orders
2/27/2013 2:44:37 PM
New orders for durable goods in the United States fell sharply in January as aircraft orders plunged, government data released Wednesday showed.
After five straight months of gains, durable goods orders dropped 5.2 percent from December, when orders rose a revised 3.7 percent, the Commerce Department reported.
The decline was steeper than the 3.5 percent average estimate of analysts.
Excluding transportation orders, which can be volatile month-over-month, new durable goods orders were up 1.9 percent, almost double the increase in December.
The weakness came from sharp drops in aircraft orders, particularly a 63.8 percent plunge in defense aircraft as the government tightened spending to reduce the yawning deficit.
Orders for nondefense aircraft dropped 34.0 percent.
The data showed stronger-than-expected strength in core nondefense capital goods orders that exclude aircraft, up 6.3 percent.
Analysts noted that was a sign of renewed business confidence despite political gridlock over drastic government spending cuts, known as sequestration, due to take effect Friday.
"The best measure of business investment, non-defense capital goods orders excluding transportation, rose sharply. Demand for machinery and electrical equipment led the way," said Joel Naroff of Naroff Economic Advisors.
"The private sector was looking to the future even as the sequestration risk continued to overhang the economy."