WASHINGTON -- Orders for airplanes, appliances and other long-lasting durable goods surprisingly dropped sharply last month, adding to some recent downbeat economic news for Federal Reserve policymakers to consider in deciding this week whether to continue reducing a key stimulus program.
Durable-goods orders dropped 4.3% in December after a downwardly revised 2.6% increase the previous month, the Commerce Department said Tuesday. Last month's decrease was the largest since an 8.1% drop in July and marked the second decline in three months.
Economists had expected orders to increase about 1.6% in December.
Orders for durable goods are a key sign of future manufacturing activity. December's drop came amid some other reports showing economic growth might have slowed instead of accelerated at the end of last year.
Sales of new homes fell 7% in December, the Commerce Department reported Monday. And hiring was disappointing last month, with the economy adding just 74,000 net new jobs.
Fed policymakers will weigh those reports as they decide whether to continue reducing the central bank's bond-buying stimulus program.
Amid positive economic signs, Fed officials voted in December to cut the monthly purchases to $75 billion from $85 billion. Analysts expect another $10-billion reduction when Fed policymakers conclude a two-day meeting Wednesday.
But the new data could lead them to hold off on a further reduction.
A decline in transportation equipment orders fueled most of last month's drop in durable-goods orders, falling 9.5% after a 7.9% increase in November.
Orders for computers and electronics also were down sharply, falling 7.8% last month after rising 0.1% in November.
New orders for civilian aircraft and parts were a big factor in the transportation decline, falling 17.5%.
The drop-off came despite a strong December for Boeing Co. The company reported 319 new orders in December, up from 110 the previous month.
Transportation orders can be volatile. Factoring out the sector, durable goods orders dropped 1.6% in December after a 0.1% increase the previous month.
Economists had expected a 0.7% increase last month in those orders.
An important sign of business investment, orders for non-defense capital goods, excluding aircraft, also fell in December. The figure was down 1.3% after rising 2.6% in November.
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