WASHINGTON — Orders to U.S. factories fell in August by the largest amount in eight months, led by a drop in demand for commercial airplanes and weakness in a key category that tracks business investment spending.
Factory orders declined 1.7 percent in August after a slight gain of 0.2 percent in July, the Commerce Department reported Friday. It was the biggest setback since orders dropped 3.7 percent in December.
Demand in a key category that serves as a proxy for business investment slipped 0.8 percent in August, following solid gains in June and July.
Manufacturing has been under stress this year as a strong dollar has hurt export sales. The big fall in energy prices has also led to cutbacks by energy companies.
Orders for durable goods, items expected to last at least three years, fell 2.3 percent in August, slightly worse than the 2 percent decline reported in a preliminary report. Demand for nondurable goods such as paper, chemicals and food dropped 1.1 percent.
The overall weakness was fueled by a 5.9 percent fall in demand for commercial aircraft, a volatile category that was down for the second month. Orders for machinery rose 0.8 percent, but orders for computers and other electronic products were off 0.5 percent.
On Thursday, the Institute for Supply Management said that its manufacturing index slid to a reading of 50.2 in September, its lowest level since May 2013.
The rising dollar makes U.S. goods more expensive in foreign markets, while weakness in China, the world's second biggest economy, is adding pressure to the global economy.
The overall economy, as measured by the gross domestic product, grew at an annual rate of 3.9 percent in the April-June quarter, a sharp increase after an anemic 0.6 percent rise in the first quarter. Economists are forecasting that growth in the current July-September quarter will slow slightly to around 2.5 percent.