WASHINGTON (Reuters) – New orders for U.S.-made goods rose less than expected in January and shipments fell for a fourth straight month, offering more evidence of a slowdown in manufacturing activity.
FILE PHOTO: A worker is seen building an aircraft engine at Honeywell Aerospace in Phoenix, Arizona, U.S. on September 6, 2016. REUTERS/Alwyn Scott
Factory goods orders edged up 0.1 percent, the Commerce Department said on Tuesday, held back by decreases in orders for computers and electronic products, after rising by the same margin in December.
There were also declines in demand for primary metals and fabricated metal products.
Economists polled by Reuters had forecast factory orders rising 0.3 percent in January. Factory orders increased 3.8 percent compared to January 2018.
Shipments of factory goods fell 0.4 percent after dropping 0.2 percent in December. They have now declined for four consecutive months, the longest streak since mid-2015.
Factory orders are likely to remain soft as unfilled orders rose only 0.1 percent in January after dropping for three straight months.
Stocks at manufacturers jumped 0.5 percent in January after edging up 0.1 percent in the prior month.
The release of the report was delayed by a 35-day partial shutdown of the federal government that ended on Jan. 25. U.S. financial markets were little moved by the data.
Reports last Friday showed manufacturing output fell for a second straight month in February and factory activity in New York state hit nearly a two-year low this month.
Manufacturing, which accounts for about 12 percent of the economy, is losing momentum as the stimulus from last year’s $1.5 trillion tax cut package fades. Activity is also being hampered by a trade war between the United States and China as well as by last year’s surge in the dollar and softening global economic growth, which are hurting exports.
In January, orders for machinery rose 1.5 percent after falling 0.4 percent in December. Orders for mining, oil field and gas field machinery fell 2.7 percent after tumbling 8.2 percent in December.
Orders for electrical equipment, appliances and components rebounded 1.4 percent after dropping 0.3 percent in December. Computers and electronic products orders fell 0.9 percent after decreasing 0.4 percent in December.
Orders for primary metals declined 2.0 percent and fabricated metal products orders fell 0.6 percent. Transportation equipment orders increased 1.2 percent in January, slowing from the prior month’s 3.2 percent rise.
Orders for civilian aircraft and parts increased 15.6 percent in January. Motor vehicles and parts orders gained 0.4 percent.
The Commerce Department also said January orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, rose 0.8 percent as reported last week. Orders for these so-called core capital goods dropped 0.8 percent in December.
Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, also increased 0.8 percent in January as previously reported. Core capital goods shipments edged up 0.1 percent in December.
Reporting By Lucia Mutikani; Editing by Andrea Ricci