Durable goods orders drop 2.4 percent in Aug
New orders for long-lasting U.S. durable (manufactured) goods, a leading indicator, fell in August, dropping by their biggest margin in seven months, following a plunge in commercial aircraft orders, the government reported on Friday.
The Commerce Department reported that durable goods orders tumbled 2.4 percent, the largest decline since January and down 24.9 percent from a year ago, after rising by a downward revised 4.8 percent in July. New orders for July were previously reported to have increased 5.1 percent.
The data coming on the heels of a report on Thursday that showed a drop in existing home sales in August was a reminder that recovery from the worst recession since the 1930s would be uneven. Analysts, as usual, were “surprised” over that decline, as well as the deterioration of durables orders.
Non-defense aircraft and new parts orders plunged 42.2 percent in August, likely reflecting a drop in civilian aircraft orders received by Boeing (BA.N). New orders for transportation equipment dropped 9.3 percent.
New durable goods orders excluding transportation were flat in August, after rising for three straight months, the department said. Analysts polled by Reuters had expected new orders, excluding transportation to rise 1.0 percent, after a 1.1 percent increase in July.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, unexpectedly fell 0.4 percent in August. Analysts polled by Reuters had expected core capital goods to increase 1.3 percent.
The prior month was revised to show a 1.3 percent drop, previously reported as a 0.3 percent fall.
Durable goods inventories fell 1.3 percent in August after dropping 1.1 percent the prior month and declining for eight consecutive months. Shipments fell 1.4 percent after two months of straight gains. Shipments rose 2.2 percent in July.
