Factory Orders Fall a Surprising 1.9% in August

Orders placed with U.S. factories fell in August by the largest numbers in more than three years, and the latest jobless claims report indicates labor markets may be losing steam, government figures released Thursday show.

Weaker demand for aircraft, electronics and other big-ticket goods contributed to August’s larger-than-expected 1.9% decrease in factory orders, offering another sign the economy may be taking a breather. The August decline came after a revised 1.7% gain for July.

Also Thursday, the Labor Department reported that new filings for state unemployment benefits held steady last week at 340,000. That could set the stage for a lackluster September employment report, to be released today. The Labor Department report is expected to show another sign of slower growth--that employers added fewer jobs in September than in August, at 170,000 compared with 250,000, as unemployment rose to 5.3% from a seven-year low of 5.1%.

August’s decline in orders to factories is the largest since a 2.2% dip in January 1993, the government said. Before the report was released, a survey of analysts’ opinions found they had expected a 1.7% decrease in factory orders.

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Factory Orders

Total new orders in billions of dollars, seasonally adjusted:

1996: $311.1

Source: Commerce Department