Orders for durable goods plummeted in August by the biggest amount in seven months as demand for airplanes and cars fell sharply, the U.S. government reported Thursday. The Commerce Department said orders for durable goods—expensive manufactured items expected to last at least three years—fell by 4.5 percent last month, nearly triple the decline expected by economists. It was the worst performance since a 4.7 percent drop in January, and August's decline followed modest increases in the three previous months. August durable-goods orders totaled $208.5 billion, 1.6 percent below the level a year ago. The durable-goods weakness was led by a 38.1 percent drop in orders for commercial aircraft, the biggest decline in a year. Demand for cars fell by 8.1 percent—the biggest drop in 19 months—as automakers struggle with the weak U.S. economy and falling demand for fuel-inefficient trucks and sport-utility vehicles (SUVs). Excluding transportation goods, orders were down 3 percent, much worse than the 0.5 percent decline expected by economists. Demand for heavy machinery fell 6.2 percent, while orders for primary metals fell by 9.3 percent, the steepest decline in 15 years. Orders for non-defense capital goods excluding aircraft—considered a gauge of business investment plans—fell by 2 percent in a possible sign that businesses are limiting their plans to expand and modernize. While manufacturers have struggled with weak domestic demand, especially in sectors linked to housing and autos, some of that decline has been offset by strong sales to foreign countries. However, there are concerns that exports could begin to weaken due to slowing economies in Europe and Japan.
