New orders at U.S. factories fell for the second month in a row in February and by a much larger-than-expected 1.3 percent, a government report showed on Wednesday.
Orders for durable goods, items intended to last three years or longer, fell 1.1 percent, revised up from -1.7 percent reported March 26, the Commerce Department said.
When the volatile transportation component was stripped out, factory orders took a steeper drop of 1.8 percent.
Analysts polled by Reuters had expected factory orders to fall 0.8 percent and durable goods orders to decline 1.7 percent.
In January, factory orders broke a five month streak of gains, dropping 2.5 percent and becoming one more harbinger of a possible U.S. recession.
New orders for machinery led the drop in February with a 12.3 percent decrease, which was the largest since January 2004, when they fell 13.0 percent.
Meanwhile, unfilled orders rose 0.9 percent to the highest level on record, $822.4 billion, the Commerce Department said.
Transportation equipment had the biggest gain in unfilled orders, up 1.6 percent to $486.3 billion.