NEW YORK ( TheStreet) -- New orders for durable goods unexpectedly dropped in December, according to the latest report from the Department of Commerce.

Durable goods orders dropped 2.5% to $191 billion after dropping 0.1% in November. Consensus had projected a 1.5% increase in durable goods. Excluding the volatile transportation sector, durable goods orders rose 0.5% , slightly less than the 0.6% analysts were expecting.

The report however included a strong 2.1% upward revision to November's estimates of durable goods excluding transportation.

Excluding defense, new orders dropped 2.5%.

Nondefense new orders for capital goods dropped 6.3% to $61.4 billion. Shipments increased 2.8% to $67.1 billion. Unfilled orders for capital goods decreased 1.1% to $498 billion. Inventories increased 0.9% to $136.9 billion.

Nondefense new orders for capital goods excluding transportation -- the core figure for capital goods orders -- was still strong, rising 1.4% after a 3.1% gain in November.

--Written by Shanthi Bharatwaj in New York

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