Demand for durable goods takes a dive in January
Demand for durable goods -- televisions, jewelry, autos and other items meant to last for years -- manufactured in the U.S. slumped in January in its largest slide since Jan. 2009.
Businesses placed 4% fewer new orders for machinery and equipment, spending $206.1 billion, according to the Commerce Department. The tumble followed three straight months of increase, including a 3.2% boost in December linked to a tax break that expired that month.
A range of categories, including computers, primary metals and electrical appliances, suffered declines. Transportation equipment orders dived 6.1% to $55.2 billion, weighed down by a 19% plunge in demand for civilian aircraft and parts.
Some interpreted the soft numbers as a signal that more promising recent data -- shrinking unemployment, high consumer confidence and more -- were masking a slower-than-expected recovery.
But in a Credit Suisse note Tuesday, analysts wrote that “we’ve seen this movie before,” saying that feeble demand for U.S. goods still has plenty of time to perk up.
“The expected weakness may not last, as the weak start to the quarter has tended to give way to a stronger end to the quarter over the last two-and-a-half years since the recession ended,” according to the note.
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