Factory Orders Fall in January Following 5 Months of Growth

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The U.S. Department of Commerce reported Tuesday morning that factory orders slipped by 1.4% ($6.9 billion) in January to $491.7 billion. Bloomberg had its Econoday consensus estimate at a −1.2%. The December drop of 1.8% was revised down by 0.1 percentage point.

January’s decline marks the first after five straight months of increases. Shipments rose 0.6% ($2.8 billion) to $498.8 billion. Unfilled orders fell by 0.3% ($2.9 billion) to $1.14 trillion after four straight months of increases.

Inventories that had been up in 14 of the past 15 months rose in January by $2.1 billion, or 0.3%, to $672.4 billion. Inventories increased by 0.7% in December. The inventories-to-shipments ratio was 1.35, flat with December.

Transportation equipment, up two of the past three months, led the increase in shipments, rising $0.6 billion, or 0.7%, to $81.5 billion. Automobile shipments fell by 1.2% month over month on a seasonally adjusted basis and are down 5.2% year over year non-seasonally adjusted.

Sales of non-defense aircraft and parts rose 0.6% month over month but are down 0.9% year over year. Sales of defense aircraft and parts dipped 0.1% month over month and are up 19% year over year.

Farm machinery sales were flat month over month and up 19.1% year over year. Construction machinery sales dipped 0.4% month over month and are up 19.8% year over year.

Turbines, generators and other electrical power transmission products posted a month-over-month drop in shipments of 3.1% but a year-over-year increase of 14.8%.