US factory orders drop 2.4 per cent in July, reflecting fall in aircraft and machinery

WASHINGTON – Orders to U.S. factories fell in July by the sharpest amount in four months, held back by weaker demand for commercial aircraft and heavy machinery. A key category that reflects business investment plans also fell.

The Commerce Department says factory orders dropped 2.4 per cent in July compared with June, when orders rose 1.6 per cent.

Orders for core capital goods, a category viewed as a proxy for business investment spending, fell 4 per cent, the biggest setback since February.

Core capital goods are considered a good measure of businesses’ confidence in the economy. They include items that point to expansion — such as machinery, computers and heavy trucks — while excluding volatile orders for aircraft and defence. The July setback was expected to be temporary.