Factory orders represent the dollar level of new orders for both durable and nondurable goods. This report gives more complete information than the advance durable goods report which is released one or two weeks earlier in the month. Why Investors Care
| Released on 4/4/07 For Feb 2007 | ||||||||||||
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Highlights
Factory orders rebounded 1.0 percent in February, following a 5.7 percent drop in January. The February figure is well below the consensus projection for a 1.7 percent boost in factory orders. The report's key information is a downward revision to the advance February durables orders - from up 2.5 percent initially to up 1.7 percent. However, January orders were revised up slightly to minus 8.8 percent from minus 9.3 percent. Nondurables orders were up 0.2 percent in February, following a 1.9 percent decrease in January. Overall, orders remain soft with the rebound in both durables and nondurables still having a way to go to offset the decline for each in January.
Unfilled orders jumped 0.9 percent in February while shipments fell 0.5 percent. Inventories were flat in both February and January and the inventory-to-shipment ratio was little changed at 1.25 in February from 1.24 the month before.
Today's report continues to show a flat manufacturing sector and is consistent with the ISM report earlier this week.
Factory orders fell a sharp 5.6 percent in January, pulled down largely by lower Boeing orders. More recently, durables orders rebounded in February by 2.5 percent, following a sharp 9.3 percent drop in January. Again, Boeing orders were responsible for the swing. The nondurables portion of total orders is likely to be up due in part to higher oil prices.
Factory orders Consensus Forecast for February 07: +1.7 percent
Range: +1.5 to +2.7 percent
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Even though monthly shipment data fluctuate less than new orders, both series show underlying trends more clearly by looking at year-over-year changes. In 2005, new orders rose more rapidly than shipments due to large gains in aircraft orders. Aircraft orders have a long lead to shipment. |
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