WASHINGTON (MarketWatch) - Orders for U.S.- made factory goods fell sharply in September for the second straight month, further evidence that the manufacturing sector is slowing at a rapid pace.
Factory orders fell 2.5% in September after falling a revised 4.3% in August, the Commerce Department estimated Tuesday.
Economists had been looking for a drop of about 0.2% in factory orders, according to a survey conducted by MarketWatch. See Economic Calendar.
Factory orders fell more than expected because of a sharp 5.5% drop in orders for nondurable goods, the biggest decline in two years.
The drop confirms some of the weakness reported in a survey of manufacturers released by this Institute for Supply Management. The survey found that sentiment in the factory sector was at its lowest level in 26 years in October. Only two of 18 industries showed an increase in activity, according to the survey.
Details of the report
Orders for durable goods such as airplanes, computers and washing machines increased a revised 0.9% in September, up slightly from 0.8% estimated a week ago.
Durables were pushed higher by a 29.7% gain in orders for new civilian aircraft. Overall transportation orders rose 6.5% in September.
Excluding transportation, factory orders dropped a record 3.7% in September.
The core capital equipment sector was also weak.
Orders for non-defense capital goods excluding aircraft -- so-called core factory orders -- fell 1.5% in September, revised slightly from the 1.4% drop reported two weeks ago, the government said. Shipments of core capital goods increased 2.0%.
Excluding defense, orders fell 3.3%.
Orders for machinery rose 0.9%, while orders for computers and electronic products fell 1.8%.
Meanwhile, shipments of factory goods fell 2.8% in September, the second straight monthly drop.
Inventories fell 0.7% in September, which was the first drop in five months.
Unfilled orders rose 0.4% in September and have risen in 31 out of the past 32 months. The level of unfilled orders is the highest since 1992. The unfilled orders-to-shipments ratio was unchanged at 5.50.
The Commerce Department's figures are seasonally adjusted, but are not adjusted for price changes.
