Factory orders edged 0.2 percent higher in December, a bit short of Econoday's 0.4 percent consensus and following an aircraft-related upswing of 2.6 percent in November that failed to reverse an aircraft-related downswing of 3.4 percent in October.

Durable orders were unchanged in December (and unchanged from last week's advance estimate), while nondurable orders, the new data in today's report, rose 0.4 percent (details on nondurables are not yet available).

Core capital goods orders (nondefense ex-aircraft) rose 0.2 percent in a gain trimmed a tenth from the advance estimate. This reading has been flat on net in recent months though November's 0.9 percent jump is an exception that was, however, largely offset by October's 0.6 percent decline.

Commercial aircraft orders were comparatively steady in December at a 0.4 percent gain following an 84.1 percent surge and 43.9 percent drop in the two prior months. Unfilled orders for commercial aircraft have been climbing sharply in a build, however, that is problematic given the prospect of cancellations following Boeing's latest quality troubles.

Fed by aircraft, total unfilled orders jumped 1.3 percent for a second month while inventories held little changed, up 0.1 percent in December. Total shipments were unchanged.

Much of the recent US economic data -- with the major exception of this morning's unexpectedly strong employment report -- have been coming in near or just below Econoday's consensus, reflected in the Relative Performance Index which is holding near the breakeven zero line, at plus 2 overall and plus 4 when excluding inflation data. Readings near zero imply no change in monetary policy.

Factory orders are expected to rise 0.4 percent in December versus November's 2.6 percent decline that reflected an upswing in commercial aircraft. Durable goods orders for December, which have already been released and are one of two major components of this report, were unchanged 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.