WASHINGTON, Aug 24: Orders for US-made durable goods tumbled 4.9 per cent in July, marking the biggest drop in 18 months, the Commerce Department said on Wednesday.

The drop in big-ticket items expected to last three years or more surprised analysts, who on average had been expecting a 1.5 per cent decline following a revised 1.9pc increase in June.

Transportation orders led the way in July, plunging 8.6 per cent after falling 1.6 per cent in June.

Excluding the often-volatile transportation goods category, July’s new orders fell 3.2 per cent, almost reversing a 3.6 per cent rise in June. Excluding defence, total orders fell 4.5 per cent.

The report, a gauge of strength in manufacturing, tends to be volatile from month to month, so economists prefer to focus on longer trends spanning a quarter or a year.

Year-to-date shipments — which feed directly into calculations of gross domestic product — are up six per cent. Year-to-date durable goods orders are up 6.2 per cent from a year ago.

“The decline of 4.9 per cent was certainly larger than expected, but it does not represent a new trend,” said Dick Green at Briefing.com.

“Orders were up 1.9 per cent in June and 7.3 per cent in May. Underlying business investment trends are strong, and the July decline simply means that third quarter GDP might be 4.5 per cent rather than 5.0 per cent ... the fundamentals haven’t changed. Economic growth is still very strong.”

The July report showed orders for computers and other electronics decreased 5.9 per cent. Computer orders fell 8.3 per cent, while communications equipment orders dropped 7.1 per cent. Shipments of electronics increased 0.4 per cent.

Orders for machinery decreased 6.2 per cent, while shipments fell 0.2 per cent.

Bucking the downward trend, orders for primary metals increased 1.1 per cent as shipments fell 1.0 per cent.—AFP