Durable goods order fall: Orders for long-lasting US manufactured goods experienced a larger-than-expected decline in January, primarily due to a significant drop in bookings for commercial aircraft.

The Commerce Department's Census Bureau reported a 6.1 per cent decrease in durable goods orders last month, following a revised 0.3 per cent decline in December.

Despite this decline, the manufacturing sector, which contributes 10.3 per cent to the economy, appears to be recovering. This follows a slight easing in production in 2023, coinciding with 525 basis points of interest rate hikes from the Federal Reserve since March 2022.

However, a recent survey from the Institute for Supply Management indicated a marginal contraction in manufacturing PMI in January.

Non-defence capital goods orders, excluding aircraft, a key indicator of business spending plans, edged up 0.1 per cent in January after a revised 0.6 per cent decline in December. Business spending on equipment also showed a modest rebound in the fourth quarter after contracting in the July–September period.

Overall, the economy grew at a 3.3 per cent annualised rate in the last quarter of 2023, following a 4.9 per cent expansion in the third quarter.

(with Reuters inputs)