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Reflecting a steep drop in orders for transportation equipment, the Commerce Department released a report on Monday showing an unexpected slump in new orders for U.S. manufactured durable goods in the month of November.
The report said durable goods orders plunged by 2.0 percent in November after edging up by a downwardly revised 0.2 percent in October.
The sharp decline came as a surprise to economists, who had expected durable goods orders to jump by 1.5 percent compared to the 0.5 percent increase that had been reported for the previous month.
The unexpected nosedive in durable goods orders came as orders for transportation equipment plunged by 5.9 percent in November after inching up by 0.1 percent in October.
Orders for defense aircraft and parts led the way lower, plummeting by 72.7 percent, while orders for non-defense aircraft and parts also fell by 1.8 percent.
Excluding the steep drop in orders for transportation equipment, durable goods orders came in unchanged in November after rising by 0.3 percent in October. Economists had expected ex-transportation orders to tick up by 0.2 percent.
A sharp increase in orders for electric equipment, appliances and components was offset by a notable decrease in orders for machinery.
Orders for non-defense capital goods, excluding aircraft, a key indicator of business spending, crept up by 0.1 percent in November after jumping by 1.1 percent in October.
However, the report said shipments in the same category, which is the source data for equipment investment in GDP, fell by 0.3 percent in November after climbing by 0.7 percent in October.
"The November shipments data suggest another contraction in equipment spending in Q4 after contracting 3.8% in Q3," said a note from economists at Oxford Economics.
The economist added, "We expect industrial momentum will remain muted in 2020 amid an environment of sluggish global growth, persistent trade policy uncertainty, a U.S. strong dollar, and subdued corporate profitability."