Durable goods orders drop by most in 3 years

Market Analyze
CBS/iStockphoto

WASHINGTON - A big drop in business spending on machinery and equipment helped pushed orders for long-lasting manufacturing goods down in January by the largest amount in three years.

The Commerce Department says orders for durable goods products that are expected to last at least three years fell 4 percent last month.

So-called core capital goods, which are viewed as a good measure of business investment plans, fell 4.5 percent, the biggest drop in a year. Demand for these goods hit an all-time high in December as companies rushed to take advantage of expiring tax breaks on purchases of capital goods.

In January, overall orders totaled $206.1 billion. That's 38.6 above the low hit during the recession. Orders are still 16 percent below their peak hit in December 2007.