January Factory Orders

Updated 09-Mar-10 19:32 ET

Highlights

Factory orders increased 1.7% in January after increasing an upwardly revised 1.5% in December.
The consensus expected an increase of 1.8%.

Last week’s advance durable goods report overestimated durable goods orders as they increased 2.6% in January, down from 3.0% in the advance release.
Nondefense aircraft remained the driver in factory orders. Aircraft orders increased 118.6% in January. If aircraft orders had held steady from December, total factory orders would have only increased 0.7%.
Nondurable goods orders rose 0.9%. Growth was in-line with the 0.7% jump in nondurable goods production, but was well below consumer demand for nondurable goods.
First quarter business investment looks incredibly weak. Orders of nondefense capital goods excluding aircraft were revised down to -4.1% in January from -2.9% in the advance release. Shipments were revised down from -1.5% to -1.7%.

Factory orders were very weak in the fourth quarter of 2008 and early 2009. This was due to severe weakness in durable orders and a downtrend in nondurable orders in late 2008. The rate of decline has eased and a sustainable uptick seems to be here.

Category	JAN	DEC	NOV	OCT	SEP
Factory Orders	1.7%	1.5%	1.0%	0.8%	1.6%
Less Defense	1.0%	1.5%	2.1%	1.4%	1.5%
Durable Goods	2.6%	1.8%	-0.4%	-0.1%	2.2%
Nondurable Goods	0.9%	1.3%	2.2%	1.6%	1.1%
Unfilled Factory Orders	0.0%	-0.9%	-0.7%	-0.4%	-0.4%
Factory Shipments	0.3%	1.9%	1.6%	0.9%	1.3%
Factory Inventories	0.2%	-0.2%	0.2%	0.4%	-1.3%
Inventory/Shipment Ratio	1.29	1.29	1.32	1.34	1.35