U.S. Factory Orders Pull Back Sharply In August After Jumping In July

(RTTNews) - After reporting a sharp jump in new orders for U.S. manufactured goods in the previous month, the Commerce Department released a report on Thursday showing that factory orders pulled back by a little more than expected in the month of August.

The report said factory orders tumbled by 10.1 percent in August, nearly offsetting the 10.5 percent jump seen in July. Economists had been expecting orders to drop by about 9.3 percent.

The sharp pullback in factory orders was largely due to volatility in the transportation sector, with orders for transportation equipment plunging by 42.2 percent in August after surging up by 73.3 percent in July.

Orders for commercial aircraft were the main culprit behind the volatility, as aerospace giant Boeing (BA) received just 107 orders in August compared to a record 324 in July.

Excluding orders for transportation equipment, factory orders edged down by just 0.1 percent in August compared to a 0.7 percent drop in July.

The drop in ex-transportation orders in August was partly due to a 0.4 percent decrease in orders for non-durable goods, which followed a 0.8 percent decline in the previous month.

The report said orders for durable goods fell by a revised 18.4 percent in August compared to the 18.2 percent drop reported last week. The steep drop reflected the volatility in the transportation sector.

The Commerce Department also said shipments of manufactured goods fell by 1.0 percent in August after climbing by 1.4 percent in July.

Meanwhile, inventories of manufactured goods edged up by 0.1 percent in August after coming in nearly unchanged in the previous month.

With inventories ticking higher and shipments falling, the inventories-to-shipments ratio rose to 1.30 in August from 1.29 in July.