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Unexpected Drop in Manufactured Goods Clouds Economy

Orders for long-lasting U.S. manufactured goods unexpectedly fell in December as did a gauge of planned business spending on capital goods, which could cast a shadow on an otherwise bright economic outlook.

The Commerce Department said on Tuesday that orders for so-called durable goods -- ranging from toasters to aircraft -- dropped 4.3 percent, pulled down by weak demand for transportation equipment, primary metals, computers and electronic products and capital goods.

Last month's decline in orders for durable goods was the largest since July and reversed November's revised 2.6 percent rise. Economists polled by Reuters had expected orders to rise 1.8 percent in December after November's previously reported 3.4 percent advance.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.3 percent after rising by a revised 2.6 percent in November.

Economists had expected orders for these so-called core capital goods to increase 0.5 percent in December after a previously reported 4.1 percent surge in November.

- Reuters