| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 1.2% | 0.9% to 2.6% | 1.8% | 0.1% | 0.3% |
Highlights
An extraordinary 1.8 percent rise in nondurable goods orders complements a 1.9 percent jump in durable goods orders to bring a 1.8 percent increase in total factory orders for September from August. That tops the expected 1.2 percent increase and follows an upwardly revised 0.3 percent gain in August from July (was reported at a gain of 0.1 percent previously).
This is a third straight month of increases in overall factory orders. Orders are up 1.3 percent ex-transportation and up 2.0 percent ex-defense so this looks like a bonafide big-time increase.
Given the AI buildout lifting the durables side, the 1.9 percent increase for durables on the month seems less surprising. It's the nondurables 1.8 percent nondurables increase that is eye-catching.
Market Consensus Before Announcement
Higher than expected 1.8 percent increase in durable goods orders already published for September augurs for similar 1.2 percent rise in wider factory orders including nondurables.
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.
