Shipments and new orders for manufactured durable goods in the U.S. both declined in January, according to a new report from the Commerce Department.
Shipments fell 0.4% in January from the month before, it’s third straight decline, after dropping 1.8% in December. Shipments of machinery led the decline, falling 2.6%.
New orders decreased 1% following a 5.3% drop in December. This was led by a decline in transportation orders, which fell 5.6%. Excluding transportation new orders moved 1.1% higher in January.
In contrast, manufacturers have a huge backlog with unfilled orders increasing 0.1% to just under $1.1 billion, the highest level on record going back to 1992.
Both of the monthly declines are being blamed some analysts, at least in part, on severe winter weather that hit part of the country during January, but that’s not the only possible reason.
“Business investment, which appeared to be gaining some momentum in the early part of 2013, has slowed dramatically as businesses are pulling back to the sideline,” said Sterne Agee Chief Economist Lindsey Piegza. “Businesses remain hesitant to invest in equipment, software, structures and certainly new employees.”
She said the key to the economy is “quality job creation and the catalyst to a robust job market is ample investment. It appears, at least at this stage, businesses have yet to regain the confidence needed to loosen purse strings and ramp up activity.”
This news came as new Federal Reserve Chair Janet Yellen testified on Capitol Hill Thursday before the Senate Banking Committee that it is uncertain if adverse weather is the cause of recent softer than expected economic reports.