WASHINGTON — Factory orders dropped by more than three times as much as analysts expected in September as the U.S. manufacturing sector continues to suffer from the economic downturn.
The Commerce Department said Tuesday that factory orders fell by 2.5 percent from August, far more than the 0.8 percent drop expected by Wall Street economists surveyed by Thomson Reuters. That's on top of a revised 4.3 percent decline in August, which was the steepest in almost two years.
Excluding autos and aircraft, orders fell 3.7 percent, the steepest drop since 1992 when the department began tracking sector-specific changes.
Orders for non-defense capital goods excluding aircraft, considered a good indication of business investment plans, fell by 1.5 percent. That follows a 2.3 percent drop in August and indicates companies are cutting back on investments.
Durable goods orders — big-ticket items such as construction machinery — rose by 0.9 percent, up from a preliminary estimate of 0.8 percent last week. But that increase was overwhelmed by a 5.5 percent drop in orders of non-durable goods, which include food, clothes and petroleum products.
Orders for primary metals, including steel and aluminum, dropped by 4.6 percent, while orders for computers and electronic equipment declined by 1.8 percent.
The Commerce Department said last week that the economy contracted at an annual rate of 0.3 percent in the third quarter.
The department said Tuesday that orders for autos and auto parts increased by 2.7 percent, after plummeting 10.6 percent in August.
Still, that increase is likely to be temporary, as automakers had two disastrous months in September and October.
October sales sank 45 percent at General Motors Corp., 30 percent at Ford, 25 percent at Honda Motor Co. and 23 percent at Toyota, according to data released Monday. Those results followed sales drops of more than 30 percent in September for Ford, Toyota, Chrysler and Nissan.