| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.4% | -1.0% to 0.6% | -0.3% | -1.3% | -1.1% |
Highlights
Orders come in down 0.3 percent in June from May, a downside miss compared with the modest 0.4 percent increase expected in the Econoday consensus. This follows a revised 1.1 percent decrease in factory orders in May from April (versus a 1.3 percent decline previously reported).
Orders ex-transportation are also down 0.4 percent on the month in June from May, and ex-defense is also down 0.4 percent.
The revised June figure for durable goods orders is up 0.5 percent, close to the 0.4 percent rise reported in the advance durables report last week.
Nondurable goods orders are also down 1.2 percent on the month in June but that is following increases of 2.2 percent in May and 1.9 percent in April.
Nondefense aircraft and parts are a bit disappointing in showing an increase of only 3.7 percent in June after plunging by 51.1 percent in May but keep in mind April saw a whopping 167.4 percent increase in this volatile component.
Market Consensus Before Announcement
A small 0.4 percent increase is the call for June after dropping 1.3 percent in May.
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.
