Washington — A sharp drop in demand for airplanes, cars and other transportation products drove down orders to U.S. factories to their lowest point in 14 months, providing more evidence of an economic slowdown.
The Commerce Department, in its latest snapshot of manufacturing activity, reported Tuesday that all factory orders fell by 3.8 percent in January, after a 0.6 percent rise the month before.
January's decline left orders at a seasonally adjusted $366.5 billion, the lowest level since November 1999.
Orders for transportation equipment plunged 23.8 percent in January, reflecting widespread weakness. That followed 12.4 percent gain in December.
Excluding the volatile transportation category, orders fell 0.3 percent, the third decrease in the last four months.
Orders for electronics and electrical equipment, including household appliances and communications equipment, declined by 6.3 percent on top of a 0.9 percent drop in December.
In another report, productivity, a key measure of rising living standards, rose at a healthy 2.2 percent annual rate in the fourth quarter.
Generally, when the economy slows sharply as it did in the second half of last year, gains in productivity become quite weak or even decline, but that hasn't happened, economists said.
The fact that productivity the amount of goods and services produced for each hour worked posted solid increases during the slowdown adds to evidence that they may represent a lasting structural change to the economy, Federal Reserve chairman Alan Greenspan has said.
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