Orders to U.S. factories for big-ticket durable goods plunged in June by the largest amount in five months, reflecting the continuing troubles in the auto industry and a steep drop in demand for commercial aircraft. The Commerce Department says orders for durable goods fell 2.5% last month, much larger than the 0.6% decline that economists had expected. It was the biggest setback since a 7.8% fall in January.
Much of the weakness reflected a 38.5% decline in orders for commercial aircraft, an industry that has been hurt by the global recession, which has crimped air travel and triggered some airlines to cancel existing orders for planes.
Orders for motor vehicles and parts fell by 1% in June, after an even larger 8.7% drop in May. The weakness reflected the disruptions caused by the bankruptcy filings of General Motors Corp. and Chrysler LLC, which shut their plants for most of June, plus the need for the entire industry to work down a backlog of unsold cars.
