| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | -0.7% | -1.5% to 1.0% | -0.7% | 2.7% |
Highlights
Data delayed by the federal government shutdown shows U.S. factory orders contracted by 0.7 percent in December, not enough to erase an unrevised 2.7 percent jump in November, following a 1.2 percent drop in October. December's reading matched expectations in the Econoday survey of forecasters.
The decline in orders came in as a 5.4 percent plunge in new orders for transportation equipment dragged down the headline number. New orders excluding transportation rose 0.4 percent, following a 0.1 percent uptick in November.
They were down 1.2 percent excluding defense, not enough to overshadow a 3.2 percent spike in November.
Manufacturers' shipments saw a 0.5 percent increase in December following a 0.2 percent dip in November and rose 0.4 percent excluding transportation building on a 0.1 percent bounce in November.
Market Consensus Before Announcement
The consensus looks for orders down 0.7 percent in December after a 2.7 percent rise in November. Durable goods orders were already reported down 1.4 percent on falling aircraft orders.
Definition
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.
Description
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.
