Durable Goods Orders Drop 4% in January as Tax Incentive Expires
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Durable goods orders in the U.S. showed a significant decline in January, according to new data from the Department of Commerce Tuesday.
Bookings for goods meant to last at least three years showed a 4 percent decline, compared to an upwardly-revised 3.2 percent gain in December. Economists were expecting a more modest drop of 1 percent.
Bloomberg noted the expiration of a 2011 tax incentive which allowed for the full depreciation on equipment purchases expired, possibly leading to an initial slowdown in investment at the start of the year.
Excluding transportation equipment, orders fell 3.2 percent in January, from a 2.1 percent gain in the prior month. The decline was the most since October 2010.
Demand for transportation equipment plunged 6.1 percent, with a 19 percent drop in civilian aircraft orders alone.
Bookings for non-defense capital goods -- excluding aircraft -- fell 4.5 percent. Economists on the Street were expecting a reading of down 1.3 percent. Shipments of the same fell from a 2.8 percent gain the prior month to a decline of 3.1 percent.
Bookings for goods meant to last at least three years showed a 4 percent decline, compared to an upwardly-revised 3.2 percent gain in December. Economists were expecting a more modest drop of 1 percent.
Bloomberg noted the expiration of a 2011 tax incentive which allowed for the full depreciation on equipment purchases expired, possibly leading to an initial slowdown in investment at the start of the year.
Excluding transportation equipment, orders fell 3.2 percent in January, from a 2.1 percent gain in the prior month. The decline was the most since October 2010.
Demand for transportation equipment plunged 6.1 percent, with a 19 percent drop in civilian aircraft orders alone.
Bookings for non-defense capital goods -- excluding aircraft -- fell 4.5 percent. Economists on the Street were expecting a reading of down 1.3 percent. Shipments of the same fell from a 2.8 percent gain the prior month to a decline of 3.1 percent.
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