If transportation is excluded, orders for manufactured goods dropped a smaller 0.8%.

Big picture: Manufacturers have struggled to achieve robust growth for the past few years because of shifting consumer spending habits and higher interest rates orchestrated by the Federal Reserve to quell inflation.

Large subsidies and incentives by the Biden administration have helped to prop up industrial spending to some extent, but manufacturers could get a boost later in the year if the Fed cuts interest rates as expected.

That could help increase business investment once borrowing costs get cheaper.

Key details: Businesses are investing plenty in new computing power, an offshoot of Bide subsidies and the budding artificial-intelligence revolution. Spending is up sharply compared to a year earlier.

All other major areas of the industrial sector are quite weak, however.

Core capital goods orders, a proxy for broader business investment, was flat in January. These orders dropped 0.6% in the prior month and are down slightly compared to a year earlier.

Shipments of manufactured goods already produced fell almost 1% and have declined in four of the past five months.

These figures are factored into gross domestic product report — the official scorecard of the U.S. economy — and suggest GDP in the first quarter might not get much help from business investment.

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