Factory orders jumped 1.2 percent in August which was well above the consensus and reflecting a 2.1 percent jump in orders for nondurable goods. Details for nondurable orders aren't available in this report but the jump no doubt reflects high prices for petroleum and related products. Orders for durable goods, which were initially posted last week, are revised 1 tenth lower to a marginal gain of only 0.1 percent.

A relief for the factory sector, and the outlook for productivity throughout the economy, is a 0.9 pecent surge in orders for core capital goods (nondefense ex-aircraft). This reverses two prior months of 0.4 percent declines and underscores the big positive in second-quarter GDP which, in the third estimate, wasn't consumer spending afterall but business spending instead (fixed nonresidential investment). Shipments for core capital goods in the first two months of the third quarter, up 0.7 percent for August but down 0.3 percent for July, point perhaps to modest strength in business spending for the quarter as a whole.

Up 0.4 percent in August, unfilled orders, boosted by aircraft, continue to point to strength ahead for the factory sector, including employment needed to work the backlogs down. Year-over-year, unfilled orders are up 6.5 percent versus only a 0.5 percent gain for new orders (unfilled orders for commercial aircraft are up 32.9 percent on the year). Total shipments rose 1.3 percent in August while inventories rose 0.3 percent.

These results are positive on net and help boost Econoday's Relative Performance Index which stands at 26 to indicate that US data are tangibly beating forecasts.

Factory orders are expected to edge 0.2 percent higher in August versus July's 2.1 percent fall. Durable goods orders for August, which have already been released and are one of two major components of this report, rose 0.2 percent on the month.

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.