On Tuesday, the Commerce Department said that U.S. factory goods orders dropped 3.3% in July, following a gain of 3.2% in June, reaching a seasonally adjusted $466.4 billion. The drop was the biggest one since August 2014, and economists had forecast factory orders to decrease 3.2% in July.
According to the Commerce Department, the decline was mainly due to the 19.2% drop in orders in volatile transportation equipment category, which is also the biggest drop since August 2014. Orders for civilian aircraft declined 70.8% in June after gaining 129.3% in June. Excluding transportation sector, factor orders increased 0.5% in July.
Orders for machinery in July fell 0.9% after gaining 0.5% in June. Mining, oil field and gas field machinery orders in July were up 1.7% after rising 2.5% in June.
In addition, motor vehicle orders were down 0.9% after being unchanged last month. The drop of motor vehicle production in recent months was due to the inventory overhang, which was caused by declining sales.
Orders for computers and electronic products increased 2.1%, and orders for electrical equipment, appliances and components rose 2.6%.