New orders for capital goods by U.S. businesses recorded their biggest drop in eight months in September, but the surprise decline was likely to be temporary as business sentiment has been upbeat in recent months.
The Commerce Department said on Tuesday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.7 percent last month, the largest decline since January of this year.
August's orders for the so-called core capital goods orders were revised to show a 0.3 percent gain instead of the previously reported 0.4 percent rise.
The decline in core capital goods orders, which confounded Wall Street's expectations for a 0.6 percent increase, is at odds with business surveys that have showed increased business appetite for capital investment.
With core capital goods declining, overall orders for durable goods—items ranging from toasters to aircraft that are meant to last three years or more—fell 1.3 percent.
It was the second straight month of declines after August's 18.3 percent tumble. Durable goods orders have been volatile in recent months because of big swings in aircraft orders.
Last month, transportation orders fell 3.7 percent as aircraft orders surprisingly dropped 16.1 percent. Boeing recently reported on its website that it had received 122 orders last month, up from 107 in August.