Factory Orders Plunge in Nearly Every Sector

Durable goods orders posted their largest drop in seven months in June, the government said in a report that raised questions about the strength of the economic recovery, particularly in manufacturing.

Orders fell 3.8% in June, the Commerce Department said. It was the largest drop since a 5.9% fall in November and was far worse than the 0.7% rise analysts had expected. It contrasted with a 0.6% climb in May.

Orders were down in almost all sectors. Machinery tumbled 6.7%, the biggest fall since an 8.1% decline in February 2000. Manufacturing orders, including unfilled orders, dropped 4.5%.

Separately, the Labor Department said the number of workers filing new claims for state unemployment benefits fell by 21,000 to 362,000 last week, the lowest level in 17 months.