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 6/4/07 For Apr 2007 | ||||||||||||
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Highlights
Factory orders proved a bit softer-than-expected in April, up 0.3 percent vs. expectations for a 0.7 percent rise and against a big upward revised 4.1 percent spike in March. The lower-than-expected gain in April was posted despite an upward revision to durable goods orders, up 0.8 percent vs. an initial 0.6 percent rise in the durable goods report. Orders for non-durable goods, the new piece of data in today's report, slipped 0.2 percent reflecting a month-to-month dip in petroleum and coal products, prices for the latter having shown a long trend of softness.
Month-to-month swings in this report, and especially the sub-categories, are common. Products showing strong demand in April included primary metals, fabricated metals, electrical equipment, and even computers and furniture. Products showing declines included machinery which has hurt by a big drop in construction machinery. Transportation equipment, reflecting declines in vehicles and aircraft, also posted a decline.
Today's data won't affect the markets or the outlook for the manufacturing sector, which after Friday's strong ISM manufacturing report looks to be on the rebound. The rebound in the sector leaves only housing as the key weak point in the economy.
Factory orders in March rose a very strong 3.1 percent, with strength primarily in durables. More recently, durable goods orders continued a recent upward trend, posting a 0.6 percent boost in April. This was despite weakness in aircraft orders. Excluding the volatile transportation component, new durables orders rose 1.5 percent in the advance report for April.
Factory orders Consensus Forecast for April 07: +0.7 percent
Range: +0.4 to +1.5 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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