Durable goods orders drop 2.4%

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WASHINGTON (Reuters) — New orders for long-lasting U.S. manufactured goods fell unexpectedly in August, dropping by their biggest margin in seven months, following a plunge in commercial aircraft orders, the government reported Friday.

The Commerce Department said durable goods orders tumbled 2.4%, the largest decline since January, after rising by a revised 4.8% in July. New orders for July were previously reported to have increased 5.1%.

Analysts polled by Reuters forecast orders rising 0.5% in August. Compared with the same period last year, new orders were down 24.9%.

Durable goods orders are a leading indicator of manufacturing activity, which in turn provides a good measure for overall business health.

U.S. stock index futures fell on the report, while government bond prices rose.

“This is a bit of a reality check for people. It means there is more to be done and we are not out of the woods yet,” said Doug Roberts, chief investment strategist at Channel Capital Research.com in Shrewsbury, N.J.