WASHINGTON Thu Oct 2, 2014 10:05am

New orders for U.S. factory goods posted their biggest decline on record in August, payback for an aircraft-driven jump a month earlier.

The Commerce Department said on Thursday new orders for manufactured goods dropped 10.1 percent. That was the largest drop in records going back to 1992.

Stripping out transportation orders which were depressed bya plunge in the volatile aircraft component, new orders were

down a more modest 0.1 percent.

Economists polled by Reuters had forecast total new orders received by factories would decline 9.3 percent.

The U.S. manufacturing sector continues to expand, although growth may be moderating. The Institute for Supply Management said on Wednesday that its gauge of factory activity showed slower growth in September.

In August, orders for transportation equipment dropped 42.2 percent, a development already made clear in the government's report on durable goods orders released on Sept 25. In July, aircraft manufacturer  () had reported outsized orders, making the decline in August unsurprising.

The Commerce Department revised slightly lower its estimate for growth in orders for non-defense capital goods excluding aircraft during August. However, the department also said July's slight drop in this gauge, which is seen as a measure of business confidence and spending plans, was smaller than previously estimated.