New orders for manufactured goods fell 2.5 percent in January, according to figures released Wednesday by the U.S. Census Bureau. It was the first time U.S. factory orders had fallen in five months,

The drop in orders was led by aircraft and computers. Excluding orders for transportation equipment, which tend to be volatile, demand was down 0.4 percent. Orders for transportation equipment fell 13 percent as orders for civilian aircraft fell 30.4 percent. Demand for automobiles dropped 1.7 percent, after a 4.4 percent decline the prior month.
Weakness was concentrated in demand for "durable" goods -- merchandise expected to last at least three years, such as cars, airplanes, machinery and computers. Durable good orders dropped 5.1 percent in January, compared with a 4.4 percent increase in December.
Inventories, up 11 of the last 12 months, increased 1.3 percent and followed a 0.9 percent December increase.
Rising inventories are often a signal of economic weakness or recession -- demand has fallen short of companies' expectations, and production will soon have to be idled to work down inventories and bring output back in line with sales.
As the amount of inventories change, the need for additional goods also changes - along with the need to transport those goods. A key number for trucking is the inventories-to-shipments ratio, which was unchanged at 1.24 for January.
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