A report released by the Commerce Department on Tuesday unexpectedly showed a steep drop in new orders for U.S. manufactured durable goods in the month of December amid a nosedive by orders for transportation equipment.
The Commerce Department said durable goods orders plunged by 2.2 percent in December after tumbling by a revised 2.0 percent in November.
The unexpected decrease by durable goods orders came as orders for transportation equipment dove by 7.4 percent in December after plunging by 5.4 percent in November. Orders for non-defense aircraft and parts led the way lower, plummeting by 45.7 percent.
However, excluding the steep drop by orders for transportation equipment, durable goods orders rose by 0.3 percent in December after edging down by 0.2 percent in November. Ex-transportation orders were expected to increase by 0.4 percent.
The modest increase by ex-transportation orders partly reflected a 1.2 percent jump by orders for fabricated metal products.
The report also said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, rose by 0.5 percent in December after climbing by 0.9 percent in November.
Shipments in the same category, which is the source data for equipment investment in GDP, increased by 0.6 percent in December after rising by 0.4 percent in November.