The split between the report's two main components shows a 0.7 percent gain for nondurable goods -- the new data in today's report where strength is tied to petroleum and coal -- and a 0.8 percent dip for durable orders which is 4 tenths improved from the advance report for this component. And driving the upward revision for durables is a major upward revision to October core capital goods (nondefense ex-aircraft) which is now up 0.3 percent from the initial 0.5 percent decline. This extends what is a very strong run for a component that offers leading indications on business investment.
Shipments of core capital goods are also revised higher, up an additional 2 tenths to 1.1 percent to extend what is also an impressive run, one that feeds directly into nonresidential fixed investment and marks a strong early plus for fourth-quarter GDP. Other readings include a 0.2 percent gain for inventories and a 0.6 percent gain for total shipments, a mismatch pointing to the need for restocking but not enough to change the inventory-to-sales ratio which holds at 1.37. Not a plus in the report is no change in unfilled orders which have yet to get going.
A plus in the report is a sharp 1.3 percent rise in vehicle orders as the auto sector responds to the hurricane-replacement sales surge of September and October. Looking past the headline, this report is very solid and points squarely at a rising contribution from the factory sector.
Recent History Of This Indicator:
Factory orders for aircraft and capital goods, which had been very strong in prior months, fell back in October and set up what is expected to be a 0.4 percent decline for the month's factory orders. But outside these factors, factory orders are likely to show strength and confirm expectations for fourth-quarter manufacturing strength.
Factory orders for aircraft and capital goods, which had been very strong in prior months, fell back in October and set up what is expected to be a 0.4 percent decline for the month's factory orders. But outside these factors, factory orders are likely to show strength and confirm expectations for fourth-quarter manufacturing strength.
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