Factory orders fell a steeper-than-expected 3.6 percent in October to fully reverse gains of 2.3 and 1.0 percent in the two prior months. Durable orders fell 5.4 percent which are unrevised from the recent advance report. Nondurable orders in October, which are the new data in today's report and where details are not available, fell 1.9 percent.

Orders for core capital goods (nondefense ex-aircraft) are revised 2 tenths lower to a decline of 0.3 percent that follow a 0.2 percent decline in September. These declines do follow a 0.9 percent surge in August but nevertheless aren't pointing to any building momentum for business investment.

Commercial aircraft are often a swing factor for factory data, down 49.6 percent in October after jumping 90.6 percent in September. Motor vehicle orders, likely reflecting October's labor strike, fell 0.8 percent.

Shipments are a negative in October's report, falling 1.4 percent including a 0.8 percent decline for durable goods. Unfilled orders, up 0.3 percent in October and 1.3 percent in September, continue to a be major plus for future shipments and factory employment as well. Inventories edged 0.1 percent higher for a second month in a row.

There are some positives in October's factory orders report which leave the Relative Performance Index at minus 7, close enough to the zero line to indicate that recent US data on net are coming within expectations.

Factory orders are expected to fall 2.6 percent in October versus September's 2.8 percent jump that showed broad strength yet once again was skewed higher by a monthly swing higher for commercial aircraft. Durable goods orders for October, which have already been released and are one of two major components of this report, fell 5.4 percent on a swing lower for aircraft.

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.