US manufacturing orders on Wednesday recorded their biggest decline in five months and new home sales slumped to a 13-year low, compounding fears that the US economy may be sliding into recession.

Orders for big-ticket manufactured items fell 5.3 per cent in January, exceeding economists’ expectations of only a 3.5 per cent decline. The disappointing headline result wiped out a revised 4.4 per cent increase in December, when buoyant aircraft sales had provided a boost to the figures.