US Factory Orders Decline in January, Impacting Economic Growth

US Factory Orders Report Highlights:

• Factory orders for January declined by 3.6% compared to the expected -2.9%.
• Shipments decreased by $5.7 billion, continued a downward trend observed in four of the last five months.
• Unfilled orders increased by $2.1 billion, rising in thirteen of the last fourteen months.

Summary from the Census:
New orders for manufactured goods in January decreased by $21.5 billion or 3.6 percent to $569.7 billion. This decline in new orders follows a 0.3 percent decrease in December, marking a decrease in three of the last four months. Shipments declined by $5.7 billion or 1.0 percent to $572.3 billion, continuing a downward trend observed in four of the last five months. Unfilled orders increased by $2.1 billion or 0.2 percent to $1,395.1 billion, rising in thirteen of the last fourteen months. The unfilled orders-to-shipments ratio rose to 7.18 from 7.10 in December. Inventories decreased by $0.8 billion or 0.1 percent to $855.8 billion, marking a decrease for two consecutive months. The inventories-to-shipments ratio increased to 1.50 from 1.48 in December.

Conclusion:
The disappointing factory orders data along with the downward trend in shipments and inventories point towards a challenging period ahead for the manufacturing sector and may have broader implications on the economy.