US durable goods orders fall in January

The US durable goods orders data for January look weak. From Reuters:

New orders for U.S.-made durable goods plunged 10.2 percent in January, the biggest drop in 5-1/2 years, as non-defense aircraft orders posted their largest fall since December 1998, a government report showed on Friday.

Outside transportation, orders for expensive items built to last three years or more posted their third straight monthly gain, rising a slightly larger-than-expected 0.6 percent, the Commerce Department report showed...

December orders were revised up to a 2.5 percent gain from the originally reported 1.3 percent advance...

Capital goods orders tumbled 23.1 percent, the biggest slide since July 2000, on a record 20 percent decline in non-defense capital goods orders and a 64.3 percent fall in defense capital goods orders.

Non-defense capital goods orders excluding aircraft, seen on Wall Street as a proxy for business spending, edged down 0.4 percent, the report showed...

Unfilled orders, which can signal future strength of factory production, fell 0.8 percent, the largest drop since a decline of 1.2 percent in October 2002.

If business spending is weak in the US, it isn't much better in the UK, as Edward Hugh notes. From FT:

The volume of business investment fell by 1 per cent in the last three months of 2005, compared to the previous quarter. The Office for National Statistics said that for the year as a whole, the volume of business investment was £113.1bn, up 1.6 per cent on 2004, against growth of 3.3 per cent in 2004.

However, higher consumer spending helped boost UK fourth quarter GDP growth to a one-year high, reports Reuters.

The Office for National Statistics said its first estimate for GDP growth in the fourth quarter of 2005 was unchanged at 0.6 percent but that it had nudged up the annual rate a tenth of a point to 1.8 percent. Economists had predicted no revision.

Household spending rose by 0.7 percent in the fourth quarter, its fastest pace in more than a year, lending credence to Bank of England forecasts that consumers are poised to drive economic recovery over 2006.