Econoday Economic Report: Factory Orders December 5, 2012

2012 Economic Calendar

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Factory Orders

Released On 12/5/2012 10:00:00 AM For Oct, 2012

	Prior	Prior Revised	Consensus	Consensus Range	Actual
Factory Orders - M/M change	4.8 %	4.5 %	-0.1 %	-1.2 % to 0.5 %	0.8 %

Highlights
Factory orders proved stronger than expected in October, up 0.8 percent vs the Econoday consensus for a 0.1 percent decline. Excluding the volatile transportation sector, factory orders rose an even stronger 1.3 percent. The durable goods component was revised upward to a gain of 0.5 percent vs last week's initial reading of flat. Nondurable goods, led by price changes for fuel, rose 1.1 percent.

Indications on business investment are mixed with shipments soft, which is a negative for fourth-quarter GDP, but with new orders solid which is a plus for future shipments. Other data show only a fractional build for inventories which is another positive for future shipments.

The manufacturing sector ended October in good shape though early indications on November have been no better than mixed. Still, the sector seems to be moving forward.

Market Consensus before announcement
Factory orders over the last two months have been really distorted by extraordinarily sharp swings in aircraft orders. Total orders rose 4.8 percent in September after falling a revised 5.1 percent in August. A slightly more positive indication comes from the important category of nondefense capital goods excluding aircraft which showed a 0.2 percent gain for new orders following a 0.3 percent gain in August. More recently, new factory orders for October were unchanged.

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

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

2012 Release Schedule

Released On: 1/4 2/3 3/5 4/3 5/2 6/4 7/3 8/2 8/31 10/4 11/2 12/5

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