New orders for long-lasting U.S. manufactured goods fell more than expected in August to post their largest decline in a year as bookings for aircraft and motor vehicles tumbled, but business spending rebounded strongly, a government report showed on Friday.
The Commerce Department said durable goods orders dropped 1.3 percent after a revised 0.7 percent increase in July. Markets had expected orders to fall 1.0 percent from a previously reported 0.4 percent gain.
The decline last month reflected a 40.2 percent plunge in non-defense aircraft orders after a 69.1 percent surge in July. Boeing Co. received only 10 orders for civilian aircraft in August, a sharp slowdown from 130 bookings in July, according to information posted on the plane maker’s website. Orders were also weighed down by bookings for defense aircraft, which fell 2.7 percent, and a 4.4 percent drop in motor vehicle orders.
Excluding transportation, orders rose by a more-than-expected 2.0 percent after falling by a revised 2.8 percent in July, previously reported as a 3.7 percent fall. It was the largest rise since March.
Markets had expected a 1.0 percent rise in orders excluding transportation.
Durable goods orders are a leading indicator of manufacturing, a sector which is leading the economy’s recovery from the longest and deepest recession since the Great Depression as businesses replenish inventories.
But manufacturing is slowing as domestic demand remains tepid, with households grappling with high unemployment and falling wealth.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, rebounded 4.1 percent in August after a 5.3 percent drop in July. Markets had expected a 2 percent rise.
Durable goods inventories rose 0.4 percent after increasing 0.6 percent in July. Shipments, which go into the calculation of gross domestic product, declined 1.5 percent last month, while unfilled orders dropped for a second straight month.
