WASHINGTON -- Orders for airplanes, appliances and other long-lasting durable goods fell in January for the second straight month, but the pace of decline lessened and there were positive signs in the data for the vital manufacturing sector.
Orders were down 1% last month compared with a steep 5.3% drop in December, the Commerce Department said Thursday
The January decline was less than the 1.6% decline forecast by analysts and looked better in comparison with a December figure that was revised down from initially reported 4.3%.
The overall decline in durable goods orders was fueled by a 5.6% decline in transportation equipment, the third drop in four months.
But transportation orders showed improvement after plunging 12.1% in December.
Excluding the volatile transportation sector, durable goods orders were up 1.1% last month. It was the first increase in that category since November and the largest since May.
Orders for non-defense capital goods, excluding aircraft, also increased in January.
The figure, an important barometer of business investment, rose 1.7% after a 1.8% drop the previous month.
"Don’t ask why business isn’t spending on capital equipment to meet the future demand from their customers because they are," said Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi in New York.
Business capital spending was close to a record high last month, which signals normal economic conditions, he said.