U.S. Durable-Goods Orders Rose in January--Update

By Josh Mitchell 

WASHINGTON--Demand for big-ticket manufactured goods rebounded last month, suggesting factories are poised to ramp up production after a winter lull.

Orders for durable goods--products like refrigerators and cars designed to last at least three years--rose a seasonally adjusted 2.8% in January from a month earlier, the Commerce Department said Thursday. Excluding the volatile transportation sector, orders climbed 0.3%.

Economists surveyed by The Wall Street Journal had expected overall orders to rise 0.6%.

Figures for durable goods are volatile and typically revised, but the broader trend suggests factories are facing a modest pickup in demand from customers. Compared with a year earlier, overall orders increased 1.6% in January.

Thursday's report showed companies stepped up investment spending after retreating late last year. A measure of business spending on equipment and software--orders for nondefense capital goods excluding aircraft--climbed 0.6% last month from December. That category had declined throughout the fall.

Weak business investment contributed to the economy's modest 2.6% annualized growth in the fourth quarter. Nonresidential fixed investment rose at a 1.9% annual rate in October through December, down from the third quarter's 8.9% pace.

Overall durable orders for January may have been affected by aircraft demand, a category that tends to swing wildly from month to month, obscuring broader demand in the economy. Major aircraft maker Boeing Co. reported a sharp decline in orders in January compared with December.

Other reports point to weaker growth for the factory sector this year, as sluggish economic growth globally and a strengthening dollar weigh on U.S. manufacturers. A key purchasing manager's index fell to 53.5 in January from 55.1 in December, suggesting the sector continues to grow but at a slower pace from late last year, according to the Institute for Supply Management.

U.S. industrial production rose modestly in January, with manufacturing output up a slight 0.2%, the Federal Reserve said earlier this month.

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