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Factory Orders  
Released On 2/5/2009 10:00:00 AM For Dec, 2008
PriorConsensusConsensus RangeActual
Factory Orders - M/M change-4.6 %-3.0 %-6.8 % to -0.8 %-3.9 %

Factory orders are buckling, pointing to greater declines in shipments and greater contraction in payrolls. New factory orders fell 3.9 percent in December following a downward revised 6.5 percent fall in November (-4.6 percent first reported). New orders for durable goods fell 3.0 percent in December, revised down from an advanced reading in last week's durable goods report of -2.6 percent. The catastrophic vehicle unit sales reported on Tuesday point to further order declines centered in transportation products. Motor vehicle orders fell 5.7 percent in December. New orders for nondurable goods, always sensitive to price changes for fuel products, fell 4.8 percent following an 8.7 percent plunge in November.

Other data in the report shows a 2.9 percent decline in total shipments and 1.4 percent declines in both unfilled orders and inventories. The inventory to sales ratio rose 2 tenths in the month to 1.44 and is up 11 tenths from October -- a warning signal that destocking, and with it unemployment, will continue to be major themes in the manufacturing sector. Monday's ISM manufacturing report shows easing rates of overall decline in January, an important note that may point to month-to-month improvement in the durable goods report at month end.

Consensus Outlook
Factory orders fell steeply in November, down 5.7 percent (originally 4.6) percent from a downwardly revised 6.0 percent decline in October. The decline was exaggerated by a price-related collapse in new orders for nondurable goods, specifically orders for energy products. Outside of nondurable goods, the decline in the month was a much less steep 3.7 percent (previously down 1.5 percent). But more recently, durable goods orders declined another 2.6 percent in December, following a 3.7 percent decrease in November. With oil prices continuing to weaken, the nondurables component for December also is likely to be negative. Overall, December should be another bleak month for factory orders.

Factory orders Consensus Forecast for December 08: -3.0 percent
Range: -6.8 to -0.8 percent

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
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 for example,new orders rose more rapidly than shipments due to large gains in aircraft orders. Aircraft orders have a long lead to shipment.
Data Source: Haver Analytics

2009 Release Schedule
Released On: 1/62/53/54/25/16/37/28/59/210/211/312/4
Release For: NovDecJanFebMarAprMayJunJulAugSepOct

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