Orders for manufactured goods fell by 3.3 percent in November, led by a huge drop in demand for military airplanes, the government said Tuesday.
The Commerce Department report Tuesday showed that a wide range of other manufactured goods -- including metals, machinery, cars, computers and household appliances -- posted gains.
But orders of transportation equipment plunged 17.3 percent, the biggest decline since a fall of 22.4 percent in January 2001. Orders for defense aircraft and parts, a volatile category, fell 82.4 percent, the biggest fall since records began in March 1992. This compared with a nearly five-fold increase in October.
Even though November's 3.3 percent decline came after factory orders rocketed by 7 percent in October, the latest snapshot of manufacturing was consistent with a host of other recent economic reports suggesting the worst of the recession may be over.
Last week, a rise in new orders to factories helped push a key gauge of manufacturing activity higher in December, suggesting the sector is beginning to emerge from a 17-month slump, the Institute for Supply Management reported.
To cope with the sour economy, manufacturers have sharply cut production, trimmed hours and let workers go. The sector shed 1.3 million jobs last year, or about 7 percent of its work force.
To revive the economy, the Federal Reserve cut interest rates 11 times in 2001 and many analysts expect that will set the stage for a rebound in the first half of this year.
The drop in factory orders was larger than Wall Street expected. In a Reuters survey, economists forecast a drop of only 2.7 percent.
Reuters and The Associated Press contributed to this report.