The Commerce Department said on Thursday that new orders for manufactured goods dropped 0.5 percent during the month. Economists in a Reuters poll had forecast a rise of 0.5 percent.
American factories appear to be one of the sectors most vulnerable to Europe’s festering debt crisis. The trend in American manufacturing has appeared softer and has added to concerns the economic recovery is losing steam. The decline in new orders in June will probably mean softer output down the road, which could weigh on economic growth.
New indications of the depth of the slowdown may emerge Friday, when the government is expected to report that employers added 100,000 new workers to their payrolls last month, according to a Reuters survey. That is up from 80,000 in June but a sharp deceleration from the average monthly increase of 226,000 in the first three months of the year.
On Thursday, the Labor Department said the number of Americans filing new claims for jobless benefits rose less than expected last week, but the data continued to be influenced by distortions from seasonal auto shutdowns.
Initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 365,000. The previous week’s figure was revised up to 357,000 from the previously reported 353,000.
Economists polled by Reuters had forecast claims rising to 370,000 last week. The four-week moving average for new claims, a better measure of labor market trends, fell 2,750 to 365,500, the lowest in four months.
Temporary plant shutdowns by automakers for annual retooling cause wide swings in claims data in July, which makes it difficult to get a clear picture of the labor market’s health.
Thursday’s report on manufacturing orders in June showed broad weakness across industries making everything from machinery and appliances to cars and electronics. New machinery orders dropped 2.1 percent and orders for motor vehicles and parts gave up 0.7 percent.
The overall decline was tempered by a 14.2 percent increase in new orders for civilian aircraft. Outside transportation, orders were down 1.8 percent.
New orders have declined in three of the last four months. In June, shipments of factory goods fell 1.1 percent.
Orders for nonmilitary capital goods excluding aircraft — seen as a measure of business confidence and spending plans — slipped 1.7 percent in June.
On Wednesday, the private Institute for Supply Management said activity in the manufacturing sector contracted in July for the second consecutive month.