U.S. factory orders likely to have dropped in January

At the end of last year, U.S. factory orders recorded a fifth consecutive monthly rise, growing 1.7 percent. The data for November was also revised up. Core capital goods shipments had risen almost 9 percent on the year and are up 12.1 percent on a three-month annual rate basis.

Equipment spending in the fourth quarter rose by an initially reported 11.4 percent; but the recent strength in core capital goods, in part, shows the upwardly revised fourth quarter equipment spending figure to 11.8 percent. Looking forward into the first quarter, core capital goods orders dropped slightly in December but remain elevated on an annualized rate basis, noted Wells Fargo in a research report. Factory orders are likely to have dropped in January by 1.1 percent, stated Wells Fargo.

“If January’s factory orders report confirms survey data strength, Q1 business investment and equipment spending could be in for another strong quarter” added Wells Fargo.

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