Orders for U.S. durable goods fell in January on a sharp drop in demand for commercial aircraft, but orders for durable goods excluding transportation rose solidly, and a gauge of planned U.S. business spending increased by the most in more than a year, pointing to underlying strength in the manufacturing sector and suggesting companies are confident about their business prospects. The Commerce Department reported Wednesday that overall durable-goods orders fell 5.2 percent, the first decline since August. Orders for commercial aircraft are volatile and can cause large swings in the overall figure. Boeing Company reported orders for only two airplanes in January, down from 183 in December, and orders for defense equipment also plunged by the most in more than 12 years. Durable-goods orders excluding transportation increased 1.9 percent, the largest gain since late 2011, after increasing 1 percent in December. Orders for core capital goods, a closely-watched gauge of business spending plans that includes machinery, equipment, and software, jumped 6.3 percent last month, indicating that companies are willing to expand their production capacities despite concerns that automatic government spending cuts later this week will slow the economy in coming months. Core capital goods orders had fallen 0.3 percent in December after posting strong gains of 3.3 percent in November and 3 percent in October. The report suggests that manufacturing is gaining momentum. Factory activity has cooled in recent months after helping to lift the economy from the 2007-2009 recession. Weak domestic demand, tighter fiscal policy, and slowing global growth are limiting manufacturing. But a private-sector report earlier this month said U.S. factory activity grew in January at the fastest pace in nine months, as measures of new orders and hiring both rose.
