| Factory Orders |
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Released On 2/3/2011 10:00:00 AM For Dec, 2010
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Prior | Consensus | Consensus Range | Actual |
| Factory Orders - M/M change | 0.7 % | -0.4 % | -0.7 % to 0.7 % | 0.2 % |
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Highlights
Factory orders rose 0.2 percent in December as price-related gains in non-durable goods offset a monthly aircraft-related downswing for durable goods. Total shipments, boosted by the key capital-goods sector, posted a second straight very strong gain. Inventories are rising in line with underlying demand though manufacturers did draw down backlogs to beef up December shipments and boost their full-year results. The outlook for the factory sector is very positive, underscored especially by Tuesday's deep strength in the ISM report.
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Market Consensus before announcement
Factory orders proved better than expected in November, rising a sizable 0.7 percent. Behind the gain is a 1.7 percent jump in nondurables orders, largely on price increases for petroleum and coal. The durables component was revised up to a modest decrease of 0.3 percent. More recently, durables orders in December unexpectedly dropped 2.5 percent, following a second revised 0.1 percent fall the month before. Weakness was primarily in nondefense aircraft orders.
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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.
Why Investors Care
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![[Chart]](showimage.asp?imageid=20355)
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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 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
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