Businesses decreased their overall orders for factory goods in October for the second straight month, signaling softening manufacturing activities.

New orders for factories decreased $1.6 billion or 0.4 percent in October, to $450 billion, the U.S. Census Bureau reported Monday. This followed a 0.1 percent September decline. The result was in line with economists' consensus. Excluding transportation, new orders increased 0.2 percent.

Demand for non-defense capital-goods orders excluding aircraft, considered a good proxy for business confidence, fell 0.8 percent.

Orders for durable goods, manufactured products expected to last at least three years or more, fell 0.5 percent, largely due to a 5.1 percent dip in transportation equipment. This category can be very volatile from month to month. In October, demand for commercial aircraft dropped 16.8 percent and orders for ships and boats decreased 38.2 percent.

Orders for non-durable goods, such as food and clothing, were down 0.3 percent.

In a separate report, the U.S. non-manufacturing sector saw a slower expansion rate in November, according to data released by the Institute for Supply Management. The activity in the service sector registered at 52 percent in November, 0.9 percentage point lower than the 52.9 percent registered in October. This is the lowest reading since January 2010, when the index registered 50.7 percent.

Modest growth has encouraged businesses to hire more employees. The economy added 120,000 net jobs in November, the Labor Department said Friday. The unemployment rate dropped to 8.6 percent, the lowest level since March 2009.