| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.5% | -0.1% to 1.0% | 1.5% | 0.0% | 0.3% |
Highlights
Factory orders jump 1.5 percent in March from February compared with the Econoday consensus calling for a gain of 0.5 percent. In addition to the strong showing for March, February is revised to a gain of 0.3 percent from the 0.0 percent previously reported.
Interestingly, the figure excluding transportation (usually swayed by volatile aircraft orders) is also up 1.6 percent. Excluding defense, orders are up 0.9 percent on the month, which suggests defense spending is skewing orders higher, which makes sense with the Iran war under way through March.
Total durable goods orders are up 0.8 percent in March from February after declining 1.2 percent in February from January. Nondefense aircraft and parts are down 21.1 percent in March from February but defense aircraft and parts are up a big 17.8 percent on the month and ships and boats are up 30.9 percent.
On the nondurables side, orders are up a robust 2.1 percent in March from February after rising 1.9 percent in February from January. That points to remarkably broad-based strength.
Market Consensus Before Announcement
With durable goods orders already reported up 0.8 percent for March, the consensus sees factory orders up a similar 0.5 percent.
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.
