New orders at U.S. factories dropped unexpectedly in September, falling 0.4 percent in their biggest decline since April on a big slide in orders for transportation equipment, government data showed on Wednesday.
Analysts polled by Reuters were expecting factory orders to rise by 0.3 percent. The Commerce Department also revised down new orders for August, to a 0.3 percent decline from the originally reported 0.1 percent dip.
It was the first time since November-December 2002 that orders have receded for two months in a row, the Commerce Department said.
For the second consecutive month, falling transportation orders dragged the overall number down. Excluding transportation, factory orders gained 0.3 percent.
Civilian aircraft orders, often a volatile series, plunged 16.3 percent, following a downwardly revised fall of 46.2 percent in August. All transportation equipment fell 3.9 percent after an 8.3 percent drop the month before.
At the same time, orders for durable goods — expensive items expected to last three years or more — rose 0.2 percent after a 0.5 percent slide in August. Machinery orders rose 3.1 percent while computers and electronic products orders gained 9.6 percent.
Non-defense capital goods excluding aircraft — considered by some a proxy for business investment — rose 2.8 percent in September.
Inventories rose 0.3 percent. The inventories-to-shipments ratio, an indication of how fast inventories would run out at the current pace of shipment, rose to 1.25, the highest level since February.