74° Good Morning
74° Good Morning

Factory orders drop more than expected

WASHINGTON - Orders to U.S. factories declined broadly in May after nine straight months of gains, raising new concerns that the recovery is stalling.

The Commerce Department said Friday that orders for manufactured goods decreased 1.4 percent in May. It was the biggest drop since March 2009.

Excluding the volatile transportation sector, orders fell 0.6 percent. That number fell 0.7 percent in April, the worst showing in 13 months. Overall orders in April grew a revised 1.0 percent.

Orders for big-ticket durable goods were down 0.3 percent, after a 2.0 percent increase in April. Electronics and commercial aircraft were among the weakest performers.

Demand for those goods expected to last less than three months fell 2.1 percent. Lower gas prices were partly to blame. But there were significant losses for makers of clothing, drinks, tobacco and chemical products.

The overall decline in orders was bleaker than the 0.5 percent drop expected by economists. Manufacturing has been a rare bright spot, helping lead the country out of recession with increased hiring and productivity. However, economists fear joblessness and less demand for exports could sap the sector's strength in the coming months.

Nondefense capital spending excluding aircraft was revised higher to a healthy 3.9 percent, indicating that many businesses expect the economy to keep growing. - AP


We're revamping our Comments section. Learn more and share your input.

More news