U.S. durable goods orders dropped 4 percent in January, the sharpest decline in three years, the Commerce Department said Tuesday.
After rising 3 percent in December, new orders for U.S. factories fell to $206.1 billion from $214.5 billion.
As of January, new orders are down two of the past seven months, but the decline in January was an unexpected jolt. Economists had expected orders to fall just 1 percent.
More telling, new orders fell 3.2 percent with the volatile category of transportation excluded from the data. That means, the drop was widespread and not due to the heavily influential category of transportation, which is dominated by big-ticket items, such as planes, trains, trucks and ships.
Transportation orders, however, had the largest decrease, falling by $3.6 billion or 6.1 percent to $55.2 billion.
After consecutive months that notched huge orders for domestic airplanes, January was a month when that category experienced a whiplash with non-defense aircraft orders down by $3.8 billion.
Inventories of goods expected to last three years or more rose for the 25th consecutive month, rising by 0.7 percent, to $372.5 billion. Inventories of machinery, up for 22 months, had the largest increase, climbing by $900 million or 1.4 percent $61.4 billion.