Led by plunging demand for aircraft, orders to U.S. factories for expensive, long-lasting goods fell 1 percent in October - the first drop in three months.
The Commerce Department said Thursday that the decline pushed durable-goods orders down to a seasonally adjusted $167.3 billion from $168.9 billion in September.Orders had risen 2.9 percent in September and 5.1 percent in August. The last time they fell was in July, when they sank 1.8 percent.
Half the October decline was in transportation goods, as falling orders for aircraft and parts led a 10.5 percent plummet in this volatile category. The decrease all but wiped out a 10.6 percent advance for transportation equipment in September.
In another report, the Labor Department said the number of American workers filing first-time claims for jobless benefits fell by 16,000 last week, the largest drop in nine weeks.
Also, the Federal Reserve issued revised figures for industrial production for the last five years that underscored the strength of the economic recovery. The Fed said output at factories, mines and utilities has risen since the 1990 recession, although production weak-ened early this year.
Analysts had predicted the October drop in durable goods, although many expected it to be even steeper. The economy overall has been expanding at a modest pace in recent months, they said.
Analysts are awaiting a Dec. 19 meeting of Federal Reserve policy-makers, the last of the year, to see if they will lower short-term interest rates again. The Fed shaved a quarter percentage point off a key rate in July, the first cut in nearly three years, but has left rates unchanged since.
The October decline in durable-goods demand included fewer orders for industrial machinery. But electronic equipment and primary metals rose last month.
New orders were 8.2 percent higher in October than for the same period a year ago. In an up-and-down year, orders fell in six of the first 10 months.
Durable goods include such items as cars, computers and appliances that react to changing interest rates because they often are purchased on credit. Analysts track the data carefully for indications of where consumer spending is headed.
Consumer spending, which fueled the economy's recovery that began more than four years ago, has slowed dramatically as Americans pile up record debt.
Demand for big-ticket goods also is a key barometer of manufacturing plans, with increased orders often leading to production expansion and new hiring.
The Commerce Department said excluding transportation, durable-goods orders rose 2.3 percent in October compared with a 0.6 percent rise the previous month.
Orders for defense equipment fell 18.4 percent last month after rising 1.1 percent in September. Excluding military goods, orders slipped 0.2 percent after advancing 3 percent in September.
Orders for nondefense capital goods excluding aircraft fell 3.7 percent in October after surging 7.3 percent in September. These orders often are a barometer of whether businesses will expand.
Unfilled orders rose 0.6 percent last month to $439.6 billion, the third gain in the last four months. The orders backlog helps measure whether current facilities and manpower are able to keep up with demand. Increases can point to larger production lines and more jobs.
Shipments in October fell 0.7 percent to $164.7 billion following two straight increases.