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2008 Economic Calendar |
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. Why Investors Care
| Released on 1/4/07 For Nov 2006 | ||||||||||||
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Highlights
Factory orders rebounded 0.9 percent in November, led by a surge in durables. November's boost was below the consensus forecast for a 1.5 percent increase. Orders for durable goods, were revised to an increase of 1.6 percent in November, following an 8.1 percent drop in October. Durable goods orders had initially been estimated to rebound 1.9 percent in November in the advance report. As usual, the latest volatility in durables orders was primarily in orders of civilian aircraft. Excluding transportation (which includes aircraft), durables orders declined 0.5 percent in November, following a 0.9 drop in October. Nondurables orders were unchanged in November, following a 0.1 percent dip in October. Lower oil prices had pulled down nondurables orders in October but firmer oil prices in November had the opposite effect.
Factory inventories rose a modest 0.2 percent in November, following a 0.3 percent rise in October. Inventory growth has slowed notably from gains in recent months. Gains had been as high as 1.0 percent per month earlier in 2006 and as high as 0.6 percent in August and September.
Today's report is somewhat dated given that recent manufacturing surveys have shown some improvement in manufacturing. But based on the orders data, manufacturing is still soft. Probably the biggest positive in today's report is the slowing in inventory growth, reducing the chances of inventory overhang. Equities may focus on the modestly lower orders numbers and see a negative. Greater emphasis should be on the slower inventories, keeping in mind the recent improvement in manufacturing survey indexes. Bonds will probably like the slightly softer orders numbers.
Factory orders fell a 4.7 percent in October, led by a drop in durables. But we have the more recent November numbers for durables orders from the advance report which showed a 1.9 percent rebound. We will see a similar figure for durables push up overall factory orders for November unless the nondurables component comes with a sharp decline. Manufacturing is still soft outside of aircraft and the markets will be watching all key components.
Factory orders Consensus Forecast for November 06: +1.5 percent
Range: +1.1 to +2.1 percent
![[Chart]](chart.gif)
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Even though monthly shipment data fluctuate less than new orders, both series show underlying trends more clearly by looking at year-over-year changes. In 2005, new orders rose more rapidly than shipments due to large gains in aircraft orders. Aircraft orders have long a long lead to shipment. |
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