New orders for long-lasting U.S. manufactured goods fell more sharply than expected in June, notching their biggest decline in five months as demand for communications and transportation equipment slumped, a government report showed on Wednesday.
The Commerce Department said durable goods orders fell 2.5 percent, the largest drop since January, after rising by a revised 1.3 percent in May, previously reported as a 1.8 percent surge. This was worse than market expectations for a 0.6 percent decline. Orders had advanced for two straight months.
New orders excluding transportation unexpectedly rose 1.1 percent in June, after climbing by 0.8 percent in May. Excluding defense, orders slipped 0.7 percent in June, after two months of straight gains.
Analysts polled by Reuters had expected orders excluding transportation to be flat.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, rose 1.4 percent in June and above market expectations for a 0.2 percent gain.
The prior month was revised to a 4.3 percent rise, previously reported as a 4.7 percent jump.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)