New orders for expensive U.S.-made manufactured items plunged in August by the largest amount in seven months, with widespread weakness signaling a slowdown in the U.S. industrial sector. Economists are concerned that the steep downturn in the U.S. housing sector and turmoil in financial markets could begin to affect the U.S. economy more broadly, raising the risks of a recession. The Commerce Department reported Wednesday that orders for durable goods fell by 4.9 percent in August, the biggest decline since a 6.1 percent drop in January. The decline was far larger than the 3.5 percent drop that economists had expected and resulted from decreases in orders in several categories. The 4.9 percent drop in durable-goods orders followed a big gain of 6.1 percent in July. That increase reflected a jump in orders for cars as dealers tried to stockpile inventory ahead of a threatened auto-workers strike. Orders for transportation equipment fell 11.2 percent, the biggest decline since January. The weakness was led by a 41 percent drop in demand for commercial aircraft. Boeing Company reported fewer orders in August after a big surge in July. Orders for cars and parts dropped 6.2 percent after surging by 10.5 percent in July. Offsetting the weakness somewhat was a 43.2 percent surge in demand for military aircraft. Excluding defense items, durable-goods orders fell 5.9 percent in August, more than reversing a 4.7 percent gain the previous month. Excluding the volatile transportation category, durable-goods orders would have fallen by 1.8 percent. Orders fell in a large number of categories including primary metals, machinery, and communications equipment. Demand rose for computers and electrical equipment.
