Orders for long-lasting US manufactured goods fell sharply in August, suggesting the main engine of economic growth was stalling and offsetting the hopeful sign provided by a drop in new claims for jobless benefits.

The Commerce Department said yesterday durable goods orders dived 13.2 percent, the largest drop since January 2009, when the economy was in the throes of a recession. The decline primarily reflected weak demand for aircraft and automobiles, although orders were down for a wide range of goods.

Excluding transport, orders were off 1.6 percent.

"It just shows the manufacturing side of the economy continues to labor here, and in fact, contract," said Tim Ghriskey, chief investment officer at Solaris Group in New York.

Underscoring the weak economy, the government revised its measure of second-quarter growth to just a 1.3 percent annual pace from 1.7 percent, on the impact a drought in the Midwest had on farm inventories.

Though housing has been one of the bright spots, a report showed deals to buy previously owned homes fell in August.

However, not all the news was downbeat. A separate report from the Labor Department showed the number of Americans filing new claims for jobless benefits fell 26,000 last week to a two-month low of 359,000.