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 12/5/07 For Oct 2007 | ||||||||||||
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Highlights
Factory orders in October rose 0.5 percent, following a 0.3 percent gain the prior month. Strength was in nondurables and likely was price related and does not reflect true strength for manufacturing. The October gain was above the consensus forecast for no change in factory orders. Strength was in nondurables, which posted a 1.3 percent advance in October, following a 2.1 percent rise the month before. Gains were led by petroleum & coal products, chemical products, and plastics & rubber products - all heavily affected by the price of oil which has been rising sharply. Orders for durable goods slipped 0.2 percent, following a 1.4 percent decline in September. The decline in durables was led by computers & electronic products and wood products.
While new orders nominally were up, they do not represent strength in manufacturing but rather reflect rising petroleum costs. On the positive side, some nonpetroleum related industries posted moderate gains - weakness in manufacturing is not yet widespread but is not as strong as suggested by the nominal new orders data.
Factory orders advanced 0.2 percent in September, following a 3.5 percent drop the prior month. The boost in overall inventories was due to a gain in nondurables orders and largely reflected price increases for petroleum and coal. Nondurables orders were up 2.1 percent while durables dropped 1.7 percent in September. More recently, durables orders fell 0.4 percent in October with weakness led by communications equipment and computers.
Factory orders Consensus Forecast for October 07: 0.0 percent
Range: -0.5 to +0.6 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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