Durable Goods Orders fell four per cent, or $8.6 billion, to $206.1 billion in January, substantially below economist forecasts, data from the Commerce Department shows.
The slump marked the greatest decline in demand in three years.
Consensus estimates from 80 economists polled by Bloomberg was for orders to contract 1.0 per cent, with the lowest prediction calling for a 4.3 per cent pullback.
Excluding transportation, orders fell 3.2 per cent, missing estimates for a flat reading.
“Transportation equipment, down following two consecutive monthly increases, had the largest decrease, $3.6 billion or 6.1 per cent to $55.2 billion. This was due to nondefense aircraft and parts, which decreased $3.8 billion,” the Commerce Department said in its statement.
Outside of transportation, computer and related electronic products saw surprising weakness, falling 10.1 per cent month-on-month. New orders of primary metals declined 6.7 per cent to $27.0 billion for the month.
January Durable Goods Orders likely fell 1.0 per cent, reversing strong gains seen at the end of 2011, economists polled by Bloomberg predict.
In December, durable goods surged 3% while November orders were revised higher to 4.7% growth.
Economists attribute the forecast decline to fewer aircraft orders. Excluding transportation, consensus is for a flat reading in January.
Looking at shipments of non-defence capital goods excluding aircraft, economists expect a 0.9 per cent decline, following a 3.1 per cent gain in December.
The Commerce Department will release results at 8:30 a.m. EST.