New orders for U.S. manufactured goods fell in January by the most in three years as demand fell across the board from machinery to aircraft, suggesting the economy started the year on weaker footing than expected.
CHRISTOPHER LOW, CHIEF ECONOMIST, FTN FINANCIAL, NEW YORK
What we are seeing is that that the buildup of inventory that made third quarter GDP so strong is beginning to crest. We are seeing a slowdown in domestic demand for equipment and also slower overseas demand. The three-month average and year-over-year increases are falling due primarily to weaker overseas demand.
Also significant is the tax break on capital investment in 2011 is no longer there in 2012
I still expect to see growth in durable goods in 2012 but at a slower pace than last year.
NICK BENNENBROEK, HEAD OF FX STRATEGY AT WELLS FARGO, NEW YORK
Definitely on the soft side. When you look at all the details, the headline was weak, the core orders were weak. It's pretty hard to spin this as anything other than a slight disappointment, emphasis on slight.
DAVID WATT, SENIOR CURRENCY STRATEGIST, RBC CAPITAL, TORONTO
It's a series that has tended to have a sawtooth volatile pattern in the past and it has it again now. Stepping back from that, I will say that it is not a great start to January. We had a fairly weak handoff from the fourth quarter to the first...It should inject a little bit of caution into the market. But will it have a lasting impact? Central banks have done nothing if not trying to bolster the spirits of the markets and keep them well funded with liquidity.
JOE SALUZZI, CO-MANAGER OF TRADING, THEMIS TRADING, CHATHAM, NEW JERSEY
This is a complete disaster, pathetic. These Wall Street analysts try to tell you that everything is getting better, but they are wrong and this number shows that.
But the market is going to put this in the back pocket. The way that this market has been rallying, with cheap money from the Fed continuing, they don't care, and that's the bullish sentiment. It will matter eventually but not now. This economy, three years after the financial crisis, refuses to show sustainable growth.
VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS
As expected, durable orders contracted after the strong support from the transportation sector seen in November and December of 2011 dissipated in January, and a reversal of that trend pulled orders down 4% last month, much larger than the 1% decline the market was expecting. This is the first decline in since September (four months), and the largest in a year. Transportation orders fell by 6.1% and excluding these orders, the headline would have fallen by 3.2%. This grouping's trend, orders less transportation, runs very similar to the headline in that this is the first month these orders have fallen since August (five months). So even with the decline, orders look to be steady. Additionally supportive towards continued growth in manufacturing activity is the fact that orders for both last November and December were slightly revised upwards.
(Americas Economics and Markets Desk)