New orders at U.S. factories fell a more-than-expected 1.7 percent in September, as orders for both durable and non-durable goods dropped, a government report showed Thursday.

Analysts polled by Reuters had been expecting a 1 percent decline. It was the second fall in three months in factory orders and followed an upwardly revised 2.9 percent rise in August.

Orders for non-defense capital goods (search) excluding aircraft — seen as a proxy for business spending — were revised down to a drop of 1.5 percent from a 1.2 percent reading released last week.

Orders for durable goods (search), items expected to last three years or more, slipped a revised 2.4 percent in September, more than an originally reported 2.1 decline.

Nondurable goods orders dipped 0.9 percent.

Inventories (search) edged up to a 1.18 months' supply of goods available at the current sales pace from a revised 1.17 months' supply in August