Monthly Factory Orders

Factory orders are a monthly measurement of the change in total value of new purchase orders placed with manufacturers.  It is considered to be a leading indicator of production.  Rising factory orders signals that manufacturers will increase activity to fill the new orders.  This creates/sustains jobs and has a chain of other economic events associated with it (like ordering more materials, shipping and a host of others).  This months forecasted number was to be -0.3% but the actual headline number came in worse than expected at -0.5% (down from the previous months revised 0.5%) showing decreasing demand/growth.  This is something to be concerned about and may impact GDP if this is demand for exported (as we saw in the ISM report demand for exports were down).

New orders for manufactured durable goods decreased $2.5 billion to $191.2 billion (a 1.3% decrease).  Excluding transportation (vehicles/parts, non-defense aircraft/parts) new orders would have increased 2.0%, so it looks like transportation demand is down (keep an eye out in the auto industry).  Excluding defense, new orders decreased -1.2%, meaning that defense spending is holding up our factory orders (which is fine, just need to be aware of what it looks like without).