Washington, DC, August 30--New orders at U.S. factories fell 1.9 percent in July, the largest drop since April 2004 but not as sharp as expected, as demand for a wide array of long-lasting manufactured goods plunged, the government said on Tuesday.
The Commerce Department said the drop in factory orders reflected a 4.9 percent fall in demand for durable goods, items expected to last at least three years, and a 1.7 percent increase in orders for non-durable goods. The durable goods figure was unchanged from an initial reading released last week.
Economists had expected overall factory orders to drop 2.3 percent.
The inventory-to-shipments ratio, a measure of how many months it would take to deplete stocks at the current shipment pace, held steady at a lean 1.19.
While orders were not as weak as expected in July, the department said orders were not quite as strong as previously thought in June, when they rose just 0.9 percent. The department had previously said June orders were up 1.4 percent.
Orders for transportation equipment plummeted 8.8 percent in July. Excluding that drop, factory orders were down 0.5 percent, the first decrease since April.
Non-defense capital goods orders excluding aircraft dropped 4.1 percent after a 4.9 percent rise in June, offering a cautionary note on business investment plans.
The department said factory shipments, which held steady in June, rose 0.7 percent in July. Inventories also rose, climbing 0.5 percent - the 18th increase in the last 19 months.
