Orders to factories for "big ticket" durable goods declined 3% in January, the first decrease in four months and the biggest drop since last July, the government reported today.
The Commerce Department said demand for durable goods, items expected to last three or more years, totaled a seasonally adjusted $128.06 billion in January, down from $132.06 billion in December.
Orders in virtually all major industry categories were down, particularly in the volatile transportation and defense categories.
Much of last month's decline was due to a 7.2% fallback in transportation orders, which had surged 22.1% in December due to high demand for aircraft and autos.
Excluding transportation, orders in all other categories were down 1.2% last month.
Overall, orders had been up a robust 7.3% in December, the biggest increase since last June. Orders for all of 1988 had been up 10.9% from 1987, the best showing since 1984, as manufacturers enjoyed an export-fueled rebound thanks to the decline of the dollar against foreign currencies.
January's 3% decrease was the biggest decline since a 7.4% drop last July and the first drop since a 2.8% decrease in September.
Orders in the erratic defense category, subject to wide swings depending on when government contracts are signed, plunged 33.5% in January after a 24.2% increase in December.
Excluding defense, all other orders were down 0.4% after rising 6.1% in December.
Orders in the key category of non-defense capital goods, considered a good sign of business intentions to modernize and expand, were up 1.5% to $39.96 billion last month. The category had increased 9.9% in December.