New orders for all factory goods rose 5.0 percent in July after an unrevised decrease of 3.3 percent in June. The increase is above the consensus of up 4.6 percent in the Econoday survey of forecasters.

New orders for nondurable goods rose 0.8 percent in July and included increases of 1.1 percent for petroleum and coal products and 0.7 percent for chemicals. Prices for food products were up 0.6 percent and included a sharp 1.4 rise for dairy products.

New orders for durable goods jumped 9.8 percent in July, but much of that reflects a hefty 34.7 rise for transportation equipment. Excluding transportation, orders were up only 0.4 percent.

Orders for motor vehicles were flat. Nondefense aircraft orders had a massive turnaround of 661.5 percent from a negative reading in June (minus $4.195 billion) to a solid positive in July ($23.555 billion). Defense aircraft orders were up 12.9 percent in July from the prior month. Ship and boat orders were up 0.8 percent in July from June.

Factory orders are expected to rise 4.6 percent in July versus June's 3.3 percent aircraft-driven decline. Durable goods orders for July, which have already been released and are one of two major components of this report, surged 9.9 percent on a rebound for commercial 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.