Business investment increases in January
The numbers: U.S. factory orders dropped 1.6% in January because of fewer contracts for large Boeing passenger planes. Most other manufacturers recorded somewhat higher bookings.
Economists surveyed by the Wall Street Journal had forecast a 1.8% decline.
If transportation is excluded, orders for manufactured goods rose 1.2%.
Key details: Durable-goods orders sank 4.5%, the Commerce Department said Monday. That’s the same as the government’s initial estimate.
The entire decline stemmed from a reduction in new contracts for Boeing BA, -1.48% planes. Commercial aircraft orders plunged 55%.
Boeing typically gets a flush or new orders at the end of one year and far fewer contracts at the start of another.
Orders for nondurable goods — food, clothing, drugs and the like — increased 1.5% in the month.
Orders for capital goods excluding aircraft and military items rose an unrevised 0.8% in January. These are known as core orders and are a proxy for business investment.
Big picture: U.S. factories are taking in fewer orders and producing goods at a slower pace as demand weakens. High interest rates have made it more costly for customers to buy big-ticket items while high inflation has led to sharply prices.
The slowdown in manufacturing could be a prelude to a broader weakness in the economy, but the much larger service side is growing at a faster clip and keeping the U.S. in expansion mode.
The Dow Jones Industrial Average DJIA, +0.12% and S&P500 SPX, +0.07% rose in Monday trades.