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 5/2/07 For Mar 2007 | ||||||||||||
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Highlights
Factory orders in March rose a very strong 3.1 percent as orders for durable goods, at a gain of 3.7 percent, were even stronger than the initial 3.4 percent rise posted in last week's durable goods report. Factory orders for February were revised 4 tenths higher to a 1.4 percent gain. Data for non-durable goods, the new information in today's report, rose a very sharp 2.3 percent in March in a gain, the largest since January last year, reflecting price increases for petroleum and coal products.
Orders for nondefense capital goods were unusually strong in March, up 4.8 percent excluding aircraft in the biggest gain in more than 2-1/2 years. Other data in the report showed manufacturing inventories up 0.2 percent, shipments up a strong 1.5 percent, and unfilled orders up a very strong 1.8 percent.
Markets don't normally respond to factory order data as the report is upstaged by the prior release of the durable goods report, but Treasuries did weaken in reaction the results. Today's data, alongside yesterday's big gain in the ISM's manufacturing index for April, point convincingly to revived momentum in the nation's manufacturing sector. Friday's jobs report followed by producer price data a week from Friday will offer the next clues on manufacturing.
Factory orders rebounded 1.0 percent in February, following a 5.7 percent drop in January. Strength was in durables. More recently, in the advance report for durables, orders posted a sharp 3.4 percent increase with widespread gains by components that should keep overall orders strong in March.
Factory orders Consensus Forecast for March 07: +2.0 percent
Range: +1.5 to +2.6 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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