Core private-sector machinery orders fell a seasonally adjusted 1.9 percent in September from the previous month to 929.1 billion yen, prompting the government Thursday to revise downward its monthly assessment of the nation's capital spending for the first time in three years.

"Although core machinery orders showed a sharp increase in the April-June period, this increasing trend has recently been slowing," a Cabinet Office official said, marking the first downward revision in machinery orders since September 2001.

The 1.9 percent drop in September is well below the 0.7 percent increase forecasted by the market, and a turnaround from the 3.1 percent rise in August.

It represents an unadjusted 5 percent increase from the previous year, the Cabinet Office said in a report.

The report also said core machinery orders for the third quarter dropped 8.4 percent from the previous quarter to 2.79 trillion yen, stirring concerns that capital spending, a major contributor to the economic recovery, may have lost steam.

The government had projected a 1.8 percent increase.

Looking ahead, the Cabinet Office projects core machinery orders to grow 1.8 percent in the fourth quarter, which would translate into a 4 percent slide from a year earlier, according to the report.

Private-sector machinery orders are considered a leading indicator of corporate capital spending six to nine months ahead.