New orders for U.S. manufactured durable goods slumped by much more than expected in the month of July, according to a report released by the Commerce Department on Friday.
The Commerce Department said durable goods orders tumbled by 1.7 percent in July after climbing by 0.7 percent in June. Economists had expected durable goods orders to drop by 0.5 percent.
The bigger than expected decrease in durable goods orders was partly due to a sharp pullback in orders for transportation equipment, which plunged by 5.3 percent in July after jumping by 1.8 percent in the previous month.
Excluding the significant drop in orders for transportation equipment, durable goods orders rose by 0.2 percent in July after inching up by 0.1 percent in June. Ex-transportation orders had been expected to rise by 0.5 percent.
The uptick in ex-transportation orders was partly due to a 1.1 percent jump in orders for computers and electronic products.
The report also said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, surged up by 1.4 percent in July after climbing by 0.6 percent in June.
Meanwhile, the Commerce Department said shipments of durable goods edged down by 0.2 percent in July following a 1.6 percent spike in the previous month.