Orders for long-lasting manufactured goods recorded their biggest drop in seven months in March and a gauge of planned business spending rose modestly, adding to signs of a slowdown in factory activity.
Durable goods orders slumped 5.7 percent as demand fell almost across the board, the Commerce Department said on Wednesday. The drop last month in orders for these goods, which range from toasters to aircraft, followed a revised 4.3 percent increase in February.
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Economists polled by Reuters had expected orders to fall 2.8 percent from a previously reported 5.6 percent increase. Excluding transportation, orders declined 1.4 percent after falling 1.7 percent the prior month.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, edged up 0.2 percent.
Orders for the so-called core capital goods had dropped 4.8 percent in February and economists had expected a 0.4 percent increase last month.
Core capital goods shipments, used to calculate equipment and software spending in the gross domestic product report, rose 0.3 percent. That followed a 1.2 percent rise in February, suggesting business spending would again contribute to growth in the first quarter.
From transportation to primary metals and machinery, orders were weak, the latest indication of cooling in a sector that has played a pivotal role in the economy's recovery from the 2007-09 recession.
Financial data firm Markit said on Tuesday its preliminary factory purchasing managers' index hit a six-month low in April. Regional manufacturing surveys have also taken a weaker tone this month.
Demand for transportation equipment plunged 15 percent, pulled down by sharp declines in orders for both civilian and defense aircraft.
Boeing received orders for only 39 aircraft, down from 179 in February, according to information posted on its website.
There were only gains in orders for motor vehicles and computers and electronic products.
(Reporting By Lucia Mutikani; Editing by Andrea Ricci)