U.S. factory orders fall 2.4% in July, less than expected

After reporting three consecutive monthly increases, the Commerce Department released a report on Thursday showing a drop in new orders for U.S. manufactured goods in the month of July.

The Commerce Department said factory orders fell by 2.4 percent in July following a revised 1.6 percent increase in June.

Economists had expected orders to decrease by about 3.4 percent compared to the 1.5 percent increase originally reported for the previous month.

The drop in factory orders in July largely reflected a 19.4 percent decrease in orders for transportation equipment, which came on the heels of an 11.7 percent increase in June.

Excluding the drop in orders for transportation equipment, factory orders actually rose by 1.2 percent in July compared to a 0.3 percent drop in the previous month.

The report said orders for manufactured durable goods tumbled by 7.4 percent in July, while orders for manufactured non-durable goods jumped by 2.4 percent.

The Commerce Department also said shipments of manufactured goods rose by 1.1 percent in July following a 0.3 percent decrease in June.

Inventories of manufactured goods edged up by 0.2 percent in July after dipping by 0.2 percent in the previous month.

With shipments rising at a faster rate than inventories, the inventories-to-shipments ratio fell to 1.29 in July from 1.30 in June.