U.S. durable goods orders fell in November as demand weakened for a wide range of long-lasting manufactured goods, the government said in a report on Tuesday.
Orders for durable goods -- items intended to last 3 years or more -- slid 1.4 percent in November after a revised 1.7-percent rise in October, the Commerce Department said.
The report, which showed drops in orders for most categories of durable goods, was much weaker than expected on Wall Street, where economists were looking for a 0.7 percent gain. The dollar dropped on the data.
Non-defense capital goods orders excluding aircraft -- viewed as a proxy for business capital spending -- fell 2.2 percent in November, the Department said. The decrease followed a revised 5.9-percent October gain that had raised hopes a long slump in business investment was easing.
A collapse in spending by businesses on plants and equipment, which had boomed in the 1990s, led the economy into recession last year and a turnaround in this area is seen as crucial for a sustained recovery.
Economists said the report reflected the uncertainties corporations face over the possible economic impact of a potential U.S. war with Iraq.
The report showed sharp drops in demand for civilian aircraft and autos that pulled orders for transportation equipment down by 1.6 percent in November. But even excluding that fall, overall durable goods orders were off 1.3 percent.
Orders for primary metals fell 4.6 percent, the largest drop since October 2000, while demand for fabricated metal products dropped 1.8 percent. Machinery orders fell 3.2 percent and orders for electrical equipment were down 0.6 percent.
The computers and electronic products category was the only major durable goods category to post a gain, with a rise in orders of 0.3 percent in November that built on a 3.5 percent rise a month earlier.
Within that category, new orders for computers fell 3.7 percent last month, while orders for communications equipment rose 1.4 percent. (Reuters)
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