La Jornada – U.S. merchandise orders fell 3.6% in January

La Jornada – U.S. merchandise orders fell 3.6% in January

Washington. New orders for U.S. manufactured goods fell more than expected in January, pressured by a sharp decline in commercial aircraft orders, but demand for computers and electronics accelerated.

The Commerce Department reported on Tuesday that factory orders fell 3.6 percent in January after falling 0.3 percent in December. Economists polled by Reuters had expected a decline of 2.9 percent during the month.

Compared to the same month of the previous year, orders decreased by 1.6 percent.

But there are signs that the manufacturing sector, which represents 10.3 percent of the US economy, is on the verge of collapse. The economy is recovering after output fell in 2023 amid a 5.25 percentage point interest rate hike by the Federal Reserve since March 2022.

Stability in the service sector

Growth in the US services sector slowed somewhat in February due to a decline in hiring, but new orders rose to their highest level in six months, indicating the sector's underlying strength.

The Institute for Supply and Supply Management (ISM) said on Tuesday that its non-manufacturing PMI fell to 52.6 last month from 53.4 in January. A reading above 50 indicates growth in the services sector, which represents more than two-thirds of the economy. Economists polled by Reuters had expected the index to reach 53, without significant change.

New orders received by service companies rose to 56.1 last month, the highest level since August, from 55 in January.

However, export orders slowed after January's rebound. As orders rose, production accelerated, with a measure of business activity jumping to a five-month high of 57.2 from 55.8 in January.

Despite the increase in orders, service inflation slowed. A measure of the prices paid by companies fell to 58.6, from an 11-month high of 64 in January.

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