Orders for manufactured goods plunge by largest amount in more than 6 years
Tuesday, November 28th 2006, 8:43 am
News On 6
WASHINGTON (AP) _ Orders for big-ticket manufactured goods plunged in October by the largest amount in more than six years, in another sign of a slowing economy.
The Commerce Department reported Tuesday that demand for durable goods fell a larger-than-expected 8.3 percent last month to a seasonally adjusted $210 billion, reflecting a big drop in demand for commercial airplanes, a category that had soared in September.
It marked the third month in the past four that orders have either fallen or shown no gain, providing evidence that the nation's factories are beginning to feel the impact of the slowdown in the overall economy.
The 8.3 percent drop in orders for durable goods, items such as airplanes and autos that are expected to last at least three years, was the largest one-month decline since a 14 percent plunge in July 2000. It followed an 8.7 percent surge in September.
Both October and September were heavily influenced by demand for commercial aircraft, which fell by 44.5 percent last month after airplane orders had nearly tripled in September.
Overall, orders in transportation industries dropped 21.7 percent as a small 1.4 percent increase in demand for motor vehicles was not enough to offset the big drop in aircraft.
There was widespread weakness in a number of industries with demand for computers, communication equipment and primary metals such as steel all falling.
Excluding transportation, orders were down 1.7 percent, the biggest decline in 15 months and the third drop in this category in the past four months.
After starting the year at a sizzling pace, economic growth slowed sharply in the spring and summer as consumers were battered by soaring energy prices, rising interest rates and a slumping housing market.
The government on Wednesday will release a revised figure for economic growth in the July-September quarter. Many economists were forecasting a slight upward revision to a 1.8 percent growth rate in the third quarter compared to an initial estimate of 1.6 percent.
The slump in housing trimmed growth by 1.1 percentage point in the third quarter and economists believe that weakness will also pull down growth in the final three months of this year.