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 9/3/08 For Jul 2008 | ||||||||||||
| ||||||||||||
Highlights
Factory orders rose 1.3 percent in July vs. an upwardly revised 2.1 percent jump in June (1.7 percent originally reported). New orders for durable goods were unrevised at 1.3 percent while new orders for nondurable goods, the new component in today's data and benefiting from gains in food products, rose 1.2 percent following a 2.8 percent jump in June. Nondurables have been boosting factory orders through the year, though the current downswing in oil prices points to month-to-month declines in this component for August. Further detail on the nondurable side is not available.
Capital goods data are unusually strong for July with nondefense orders jumping 6.3 percent and 2.5 percent excluding aircraft. Shipments in these categories were also strong, up 2.5 percent and up 1.6 percent excluding aircraft. These gains point tentatively to quarter-to-quarter growth in business investment though whether this strength will be matched in August is uncertain.
Total unfilled orders rose 0.7 percent in July following a 1.0 percent rise in June and a 0.9 percent gain in May. Strength in unfilled orders is a big positive for the manufacturing sector, offering insurance against any future dip in new orders. Total shipments jumped 2.1 percent following a 1.9 percent gain in June, both very strong results. Total inventories rose only 0.5 percent in July, well under the rise in shipments and, in contrast to yesterday's ISM manufacturing report, offering no hint of overhang. The total inventory-to-shipments ratio is very lean at 1.20 vs. June's 1.22.
Though July's data from the manufacturing sector proved unusually strong, yesterday's ISM report for August was no better than flat -- a result that renews concern over the sector.
Factory orders got some real as well as an artificial lift in June. Factory orders surged 1.7 percent in June. Orders for non-durable goods, reflecting price gains for petroleum and coal, jumped 2.5 percent in June. Meanwhile, durable goods orders rose a revised 1.3 in June percent - with strength seen in primary metals, fabricated products, machinery and electrical goods. Transportation goods fell due to a drop in orders for civilian aircraft. Looking ahead, factory orders should remain strong in July as the durables component came out with a 1.3 percent advance.
Factory orders Consensus Forecast for July 08: +0.8 percent
Range: -0.1 to +1.6 percent
![[Chart]](chart.gif)
|
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. |
| 2008 Release Schedule | ||||||||||||||||||||||||||
|
powered by
![[Econoday]](../../../../../../../../../images/logo.gif){kind=logo}