New orders in the manufacturing sector fell by the largest amount on record in August reversing the commercial aircraft boosted surge a month earlier.
Placements for U.S. factory goods sank 10.1 percent according to the Commerce Department today. It was the biggest monthly decline in the 58 year history of the series which goes back to 1956. Economists in the Bloomberg survey had forecast a drop of 9.5 percent. The 10.5 percent jump in orders in June had also been the largest on record.
Leaving out orders in the volatile transportation area, primarily commercial aircraft from the Boeing Company, orders fell a modest 0.1 percent following June's 0.7 percent decline. It was the third drop in the last four months.
The Chicago based aircraft manufacturer had reported a record 324 new plane orders in July prompting the huge increase in factory orders, but that fell to 107 in August and thus the expected reversal in the month's orders. Orders for transportation equipment sank 42.2 percent in August.
The American manufacturing sector has expanded for 15 straight months since stalling in April and May of last year. Factory activity fell unexpectedly in September as the Institute for Supply Management reported Wednesday that its purchasing managers' index dropped to 56.6 from 59.0, a post-recession high, in August.
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