US durable-goods orders fall sharply

Orders for U.S. durable goods recorded their biggest decline in almost a year in July, as demand for commercial aircraft plunged and businesses spent less on capital goods, the government reported Monday, indicating that the manufacturing sector continues to struggle after a weak first half of the year. The Commerce Department said orders for durable goods—expensive manufactured items expected to last at least three years—plummeted 7.3 percent last month, the biggest drop since last August and the first decline in four months. Most of the decline in durable-goods orders was due to a 19.4 percent fall in bookings for transportation equipment, reflecting a 52.3 percent drop in orders for civilian aircraft. But even excluding transportation, overall orders fell 0.6 percent. Economists focus on orders for core capital goods, which exclude volatile aircraft and defense orders. Spending in the category fell 3.3 percent in July, following four consecutive months of gains. It was the biggest decline since February. The decline in orders for both durable and capital goods suggested manufacturing likely will not rebound as quickly as many economists had expected. Combined with a slowdown in residential construction and new home sales, the report implies the economy might not accelerate much from the second quarter’s 1.7 percent annual rate.