Durable Goods Orders Fall By Much More Than Expected In January

The report showed that durable goods orders fell 5.2 percent in January following a revised 4.6 percent decrease in December. Economists had expected orders to fall 2.5 percent compared to the 3.0 percent decrease that had been reported for the previous month.

The steep drop in orders was due in large part to a 13.5 percent decrease in orders for transportation equipment, which followed a more modest 1.5 percent decrease in December.

A 6.4 percent decrease in orders for motor vehicles and parts contributed to the drop in orders for transportation equipment along with a 28.3 percent decrease in orders for defense aircraft and parts. The decreases more than offset a rebound in orders for commercial aircraft.

Excluding the steep drop in orders for transportation equipment, durable goods orders fell by a more modest 2.5 percent in January after a revised 5.5 percent decrease in December.

The drop in orders excluding transportation was more in line with the expectations of economists, who had expected a 2.2 percent decrease compared to the 3.6 percent that had been reported for the previous month.