US factory orders, pending home sales fall in January

Yesterday's news on the US economy was negative but still better than expected. Reuters reports:

Factory orders fell 4.5 percent in January, slightly less than expected but still the biggest drop since July 2000, as orders for durables, machinery, computers, and aircraft fell, a Commerce Department report showed.

Analysts polled by Reuters were expecting factory orders to fall 5.3 percent.

Orders for durable goods...fell 9.9 percent, the steepest decline since a 14.2 percent drop in July 2000. However, the decline in durables was revised up from a 10.2 percent drop reported February 24...

Factory orders for December were revised up to a 1.6 percent rise from an initially reported 1.1 percent gain...

Non-defense capital goods excluding aircraft, a proxy for business spending, rose 0.1 percent...

The Pending Home Sales Index, based on contracts signed in January, stood at 116.3, down 1.1 percent from December and 4.8 percent below a year ago, the National Association of Realtors said. December's index was revised up to 117.6 from an originally reported 116.4.

In its latest assessment of the economic outlook, the OECD expects a rebound in the US economy in the first quarter.

The marked economic slowdown in the United States in the fourth quarter of 2005 reflected the adverse one-off effects of the late summer hurricanes rather than fading underlying strength... Recent US data point to a sharp rebound in the first quarter of this year, even after taking into account that unseasonally mild weather in January boosted retail sales and some of the other high-frequency indicators. Job creation has remained robust and business confidence is consistent with above-par growth in the near term.

For the other G7 economies:

In Canada...growth has remained resilient... Japan is now enjoying a broadbased recovery... [T]he strong external side should feed through to euro area domestic demand and a rebound can be expected in the first half of 2006... In the United Kingdom, activity is set to continue to grow at around its potential rate.