US factory orders dip 0.2 percent in August

WASHINGTON: New orders for US factory goods fell in August for the second time in three months, suggesting a possible softening in the manufacturing sector which has carried the economic recovery.

The Commerce Department said on Tuesday orders for manufactured goods decreased 0.2 percent after a downwardly revised 2.1 percent increase in July.

Economists had forecast orders to be unchanged after a previously reported 2.4 percent increase in July. While the report showed some weakness in the factory sector, a report on Monday by the Institute for Supply Management showed national manufacturing activity rose in September, which had eased concerns the United States was slipping into a new recession.

The Commerce Department report showed orders excluding transportation decreased for the first time in six months, falling 0.2 percent.

Orders for transportation equipment dropped 0.1 percent in August as demand for motor vehicles fell 5.3 percent. Civilian aircraft orders rose 23.5 percent. Unfilled orders rose 0.9 percent after climbing at the same rate in July, suggesting factories might have to ramp-up production. Shipments fell 0.2 percent after rising 1.2 percent the prior month, while inventories increased 0.4 percent.

The department said orders for durable goods, manufactured products expected to last three years or more, fell 0.1 percent, unrevised from an initial estimate. Durable goods orders excluding transportation were down an unrevised 0.1 percent, while orders for non-defense capital goods excluding aircraft rose a downwardly revised 0.9 percent.

Copyright Reuters, 2011