Highlights
A bounce higher in energy prices helped trim declines in January's factory orders. The month's 1.9 percent decline is steep but much less steep than December's 4.9 percent decline (revised from -3.9 percent) and the 6.5 percent and 6.0 percent declines of the prior two months. Nondurable orders rose 0.5 percent in January for a rare gain, one tied to higher fuel prices. Orders for durable goods fell 4.5 percent, revised higher from the 5.2 percent reading in last week's durable goods report but in line with similar month-to-month declines in December and November. Orders for capital goods showed very severe declines as businesses cut current production and lower their outlook for future production.

The factory sector his literally fallen off a cliff since early in the fourth quarter. But Monday's ISM report has raised talk that the pace of contraction may finally be slowing. Other data in today's report includes a 1.7 percent drop in shipments, the same 1.7 percent drop for unfilled orders, and a comparatively thin 0.8 percent decline for inventories that suggests destocking was still an issue, at least in January, for the factory sector. The ISM report points to an important easing in inventories during February.

Market Consensus before announcement
Factory orders are looking ugly - pointing to further declines in manufacturing. Factory orders are pointing to greater declines in shipments and greater contraction in payrolls. New factory orders fell a revised 4.7 percent in December (originally down 3.9 percent), following a 6.5 percent drop in November. We can expect more of the same for January as we already have the initial estimate for the durables component at down a sharp 5.2 percent for the month.

2009 Release Schedule

Released On: 1/6 2/5 3/5 4/2 5/1 6/3 7/2 8/5 9/2 10/2 11/3 12/4 Release For: Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct