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 3/5/08 For Jan 2008 | ||||||||||||
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Highlights
Factory orders fell 2.5 percent in January, no surprise given the previously released plunged in the durable goods component, now at a revised -5.1 percent and showing declines across most categories. The nondurable goods side shows a 0.3 percent rise reflecting a gain in food products, prices for which have been on the rise. Total inventories show a jump of 1.3 percent in the month, possibly a concern given slowing economic conditions. But shipments were still solid in January, up 1.1 percent. Unfilled orders are also a plus, up 0.7 percent. Manufacturing data have been mixed at the very best, evidence that the sector has stalled, which however can be viewed as a positive given contraction in housing and troubles in the financial sector.
Factory orders jumped 2.3 percent in December, reflecting a 5.0 percent surge for durable goods but being restrained by a 0.4 percent decline in nondurable orders. More recently, durables dropped 5.3 percent in January due to a fall in aircraft orders. While nondurables orders once again may be affected by a swing in oil prices, this time upward, this will not be enough to offset the drop in durables in January.
Factory orders Consensus Forecast for January 08: -2.5 percent
Range: -3.0 to +2.3 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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