Orders for goods made in U.S. factories sank a sharp 2.1 percent in July, the Commerce Department said Tuesday.
This was the first decline after four months of rising orders.
The decline was driven by a sharp downturn in the volatile category of civilian aircraft. Orders of planes and airplane parts fell 43.6 percent compared with a month earlier. Year to date, however, orders are up 32 percent.
Orders of autos and parts rose 0.3 percent and are up 4.4 percent in the first seven months of the year compared with the January through July period of 2022.
Excluding transportation, orders rose 0.8 percent. That’s an acceleration from the previous month’s 0.3 percent gain and much better than Wall Street expected.
Orders for nondefense capital goods excluding aircraft, a category considered a proxy for business investment, rose 0.1 percent, consistent with a preliminary report released in August. Durable goods orders fell 5.2 percent, also matching the preliminary estimate.
Nondurable goods orders rose 1.1 percent.
Economists had expected overall orders to fall by 2.3 percent, so the data is better than expected. High interest rates are driving up the cost of investment in capital equipment and putting downward pressure on business spending. Many large retailers have been reducing inventories in expectation of a downturn that has not materialized.