WASHINGTON – Orders for U.S. manufactured goods sank in June at the sharpest rate in seven months, the government said Friday, highlighting a trend of weak demand for capital equipment such as machinery and computers.
Factory orders tumbled 2.4 percent in June to $313.19 billion after a 0.6 percent increase in May. The May increase was revised from a previously reported 0.7 percent increase.
June's decline was the steepest since a 4.1 percent drop in November 2001 in the aftermath of the Sept. 11 attacks on the United States.
The closely watched category of durable goods orders slumped 4.1 percent in June after a 0.4 percent increase in the previous month.
The report showed broad weakness in the factory sector with demand for computers and electronics tumbling 4.5 percent and orders for new machinery sinking 7.1 percent.
Transportation orders dropped 5.8 percent in June after a 0.5 percent decrease in May.
Total unfilled factory orders, an indicator of future demand, dropped 1.5 percent in June. Shipments, which depict current activity, slid 1 percent.
Factories continued to whittle down inventories, which fell 0.1 percent to post their 17th consecutive decline.
In a report that dampened hopes the slumping manufacturing sector might be poised for improvement, the Institute for Supply Management said on Thursday its factory gauge fell in July to its lowest level since January, down to 50.5 from 56.2 in June. While that was the sixth straight month of growth, the index showed manufacturing was barely expanding, at a level just above 50.
Earlier on Friday, the Labor Department said U.S. payrolls grew a weaker-than-expected 6,000 in July after a 66,000 rise in June. The unemployment rate stayed steady at 5.9 percent.
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