The Commerce Department said today that new orders for durable goods fell 0.3% in August, after even bigger drops of 2.5% and 1.1% in June and July. The last time durable goods orders fell for three consecutive months was from April to June 1999.
According to the report, orders for transportation equipment fell 2.1% in August, following a 1% increase in July. Orders last month for cars declined 0.6% and orders for airplanes were down 5.5%.
Economists say manufacturers, hardest hit by the slowdown, are likely to see demand dampened further in the wake of the terrorist attacks on New York and Washington. That is not a good sign for carriers hoping to recover during the economic slowdown.
One area of the economy that has held up well despite the slowdown is the housing market, aided by low mortgage rates. But some economists expect home sales to slow because the attacks sapped consumer confidence and are likely to push unemployment and layoffs higher.
Fed Chairman Alan Greenspan has said a main reason for the economic slowdown is businesses sharply cutting spending for plants and new equipment, particularly high-tech equipment, which fed the country's economic boom not so long ago.