Orders for the United States durable goods fell more than forecast in July after three months of increases, indicating manufacturing will be slow to strengthen.
Bookings for goods meant to last at least three years decreased by 7.3 per cent, the most since August 2012, after a 3.9 per cent gain in June, the Commerce Department said in Washington.
Bloomberg News reports that the median forecast of economists called for a four per cent drop. Orders waned for aircraft and capital goods such as computers and electrical equipment.
The report shows struggling overseas markets and the effects of federal government spending cuts are lingering and holding back manufacturing, which accounts for about 12 per cent of the economy.
Further improvement in the labor market and sustained demand for automobiles and housing would help spur production through the second half of the year.
The data support “our view that the fiscal drag will last longer and part of the decline was from defense — and growth will stay moderate,” said Michael Gapen, senior US economist at Barclays Plc in New York. “We are in a highly uncertain environment.”
Stock-index futures were little changed after the figures, with the contract on the Standard & Poor’s 500 Index expiring in September rising less than 0.1 per cent to 1,662.3 at 8:55 a.m. in New York.
Orders excluding transportation equipment, which is volatile month to month, declined by 0.6 per cent after a 0.1 per cent gain in June that was previously estimated as a 0.1 per cent decrease.
Forecasts for all durable goods orders in the Bloomberg survey of 77 economists ranged from a drop of 8.2 per cent to a three per cent advance.
The figures showed bookings for commercial aircraft decreased by 52.3 per cent after climbing 33.8 per cent in June. Chicago-based Boeing Company said it received 90 aircraft orders in July, down from 287 the previous month.
Orders for military equipment decreased by 21.7 per cent last month after a 28.7 per cent jump in June.
Demand excluding defense hardware fell by 6.7 per cent in July.
Demand for non-defense capital goods excluding aircraft, a proxy for future business investment in computers, electronics and other equipment, dropped by 3.3 per cent in July, the biggest decrease in five months, after rising 1.3 per cent in the prior month.
Shipments of those products, a measure used in calculating gross domestic product, declined by 1.5 per cent after falling by 0.8 per cent in June.