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First Cut: January factory orders up 0.1%, same as December, held back by nondurables

New orders for all factory goods edged up 0.1% in January, the same as in December. New orders for durables were up 0.3% (unrevised from the advance report) and nondurables were down 0.2% as prices for petroleum continued to decline, albeit at a much slower pace than in recent months.

Like the advance report, the increase was largely due to the transportation component which reflected a gain of 15.6% in nondefense aircraft and 3.4% in defense aircraft, plus a small increase of 0.4% for motor vehicles. “Core” new orders for durables — total durables less civilian aircraft and defense capital goods — inched down 0.1%, a small decline that indicated that the underlying trend for orders is about stable within normal month-to-month variation.

Unfilled orders rose 0.1% in January from the prior month. Nearly 60% of unfilled orders are accounted for by aircraft and parts. The January data is too old to tell if the problems with the 737 Max will result in lost and cancelled orders. The February numbers on durable orders on Tuesday, April 2 at 8:30 ET are probably also too early. However, Boeing’s commercial aircraft report for March — which should be out early in the second week of April — could show if there has been an initial wave of order cancellations.

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