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Orders of US Manufactured Goods Slide in January: Govt

Feb. 27, 2023
According to the Commerce Department, new orders for durable goods slipped 4.5% in January.

Orders of big-ticket U.S.-manufactured goods fell in January, according to government data released Monday, on the back of slowing aircraft demand.

New orders for durable goods slipped 4.5% to $272.3 billion, said the Commerce Department, dropping more than expected following December's 5.1% jump.

The headline figure was bogged down by aircraft orders, and excluding the transportation segment, which can be volatile, new orders rose 0.7% from December to January.

But excluding defense, orders slumped 5.1%.

Analysts are looking to a slowdown across different sectors of the economy to give policymakers confidence to pullback on their campaign to battle stubborn inflation.

To rein in price increases, the Federal Reserve hiked the benchmark lending rate multiple times last year, but the economy has not cooled as definitively as hoped.

For now, data suggests that the world's biggest economy is running hotter than officials would like, with the Fed's preferred inflation gauge rising 5.4% from a year -- above policymakers' two percent target.

Retail sales also bounced in January, while jobs data remained solid.

"We have no argument with the idea that the chance of a 50 basis points rate hike in March has risen," said Ian Shepherdson of Pantheon Macroeconomics in a recent report.

A half-point rate hike would be a step up after the U.S. central bank moderated its size of increases at the end of policymakers' last two meetings.

But what would trigger a "substantial rethink about rates," Shepherdson said, would be if key figures like payrolls, retail sales and consumer prices all ease, suggesting that upticks in January were just temporary.

Copyright 2023, Agence France-Presse

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