Driven by aircraft, factory orders rose 1.8 percent in December with the second estimate for the durables half of this report unchanged from the first estimate's 5.6 percent surge. The first estiamte for nondurables is a fall of 1.9 percent, reflecting easing price pressues for oil-related goods.

Year-end business at Boeing was extremely heavy, evident by a more than doubling in commercial aircraft orders together with a 15.2 percent rise for defense aircraft. Other strong gains include mining and oilfield equipment up 7.4 percent, turbine and generators up 5.7 percent, and nondefense communications equipment up 4.4 percent.

Yet total machinery orders, which are at the heart of the capital goods group, fell 1.7 percent on the month following a 0.6 percent decline in November. Core capital goods (nondefense ex-aircraft) fell 0.1 percent following a 0.2 percent decline in November that together offset October's thin 0.3 percent gain. These results underscore weakness in business investment and business confidence.

Unfilled orders, skewed higher by a 2.4 percent surge in commercial aircraft, rose a very strong 1.3 percent. Inventories rose 0.4 percent while shipments fell 0.7 percent following November's 0.9 percent drop.

This report is mixed and if not for aircraft would be weak. The headline gain was a bit below expectations and is reflected in Econoday's Consensus Divergence Index which, at minus 4, indicates that recent US data are coming in a bit below expectations.

Factory orders are expected to rise 2.2 percent in December that would follow November's steep 1.8 percent drop. Durable goods orders for December, which have already been released and are one of two major components of this report, surged 5.6 percent in the month on a burst of aircraft orders.

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.