Business surveys have been contracting for months and now actual factory orders are as well, falling a very steep 1.8 percent in November to exceed the low end of Econoday's consensus range. This is only the third monthly fall of the post-pandemic period and pulls year-over-year growth, at 7.3 percent, to its lowest level in nearly two years.

Weakness is also evident in unfilled orders which were unchanged on the month for their poorest showing also in nearly two years, a reading that will limit expectations for further growth in factory payrolls. Inventories were unchanged in the month while shipments fell 0.6 percent.

November's split between the report's two main components shows a 1.4 percent drop in new orders for nondurable goods and a 2.1 percent drop in new orders for durable orders, the latter unrevised from the advance reading published late last month.

A negative of special concern is a marginal 0.1 percent rise in new orders for core capital goods (nondefense ex-aircraft). This follows a 0.7 percent drop in September and only a 0.3 percent rise in October and points to a lack of new business investment and underscores the general weakness of the report.

In contrast to employment (specifically this morning's very strong employment report), manufacturing activity is considered to be a leading signal for pivots in overall economic activity, and these results if extended in future months will raise recessionary concerns.

Factory orders are expected to fall 0.7 percent in November that would follow a strong 1.0 percent rise in October.

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.

Investors want to keep their fingers on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more moderate growth which is less likely to cause inflationary pressures. By tracking economic data like factory orders, investors will know what the economic backdrop is for these markets and their portfolios. The orders data show how busy factories will be in coming months as manufacturers work to fill those orders. This report provides insight to the demand for not only hard goods such as refrigerators and cars, but nondurables such as cigarettes and apparel. In addition to new orders, analysts monitor unfilled orders, an indicator of the backlog in production. Shipments reveal current sales. Inventories give a handle on the strength of current and future production. All in all, this report tells investors what to expect from the manufacturing sector, a major component of the economy and therefore a major influence on their investments.