U.S. Factory Orders Tumble 5.6%

March 6, 2007
Largest drop in 6 years.

Orders for manufactured goods fell 5.6% in January, the largest slump in more than six years, the Commerce Department said March 6 in the latest sign of a sluggish industrial sector.

Excluding transportation related orders, factory orders fell 2.9 % in January after rising 2.3% in December. Excluding orders for defense related goods, factory orders fell a record 5.5% in January, after rising 3.2% in the prior month.

New orders fell in January after rising a revised 2.6% in the prior month. That was the largest decline since July 2000, when factory orders slumped 8.6%, and worse than the 4% drop anticipated by Wall Street.

Durable goods orders fell a revised 8.7% in January, sharper than the already steep 7.8% drop reported a week ago. It was the sharpest drop in orders for big-ticket items like cars and appliances since July 2000.

The manufacturing side of the economy has been struggling for several months amid weakness in the housing and auto sectors. This has been reflected in weak data on durable goods orders. One report showed industrial production down 0.5% in January. But the Institute of Supply Management, in its February snapshot of manufacturing activity, suggested a rebound was underway. The ISM index of national industrial activity rose to 52.3% from 49.3% in January. Numbers above 50 indicate expansion in the ISM survey.

Copyright Agence France-Presse, 2007

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