Durable Goods Orders in U.S. Fell 7.8% in January (Joe Richter)

   ``It's not a great start to the quarter,'' said Christopher Low, chief economist at FTN Financial in New York.

 By Joe Richter

  Feb. 27 (Bloomberg) -- Orders placed with U.S. factories for durable goods fell more than forecast in January as excess inventories prompted companies to limit spending.

  The 7.8 percent decline, the biggest since October, reflected less demand for commercial aircraft and the biggest slide in business equipment orders in three years, the Commerce Department said in Washington. Orders excluding transportation equipment dropped 3.1 percent.

  The figures suggest reluctance among companies to invest carried into 2007 after spending on equipment fell by the most in four years during the fourth quarter. Bloated stockpiles at auto dealers and construction-equipment makers may restrain production early this year, Federal Reserve Chairman Ben S. Bernanke told Congress this month.

  ``It's not a great start to the quarter,'' said Christopher Low, chief economist at FTN Financial in New York. ``Even though companies are flush with cash, they're not going to spend if they don't think it will translate into sales.''

  The numbers came a day after former Fed Chairman Alan Greenspan was quoted as saying that he couldn't rule out a U.S. recession later this year.

  The yield on the benchmark 10-year note declined 4 basis points to 4.59 percent at 8:58 a.m. in New York. The dollar remained weaker. Economists at Morgan Stanley lowered their estimate to first-quarter growth to 2 percent, from 3 percent before the report.

more

READ MORE: Bloomberg