The Commerce Department said on Thursday new orders for manufactured goods dropped 1.0 percent after a revised 0.7 percent decline in April. Factory orders have dropped in nine of the last 10 months. 

Economists had forecast orders falling 0.5 percent in May after April's previously reported 0.4 percent drop.

Excluding the volatile transport component, orders nudged up 0.1 percent in May, reversing April's 0.1 percent decline.

Manufacturing, which accounts for about 12 percent of the U.S. economy, is struggling with the lingering effects of a strong dollar and lower crude oil prices, which has squeezed profits of multinational corporations and oil-field firms.