Factory Orders Edge Lower

Factory orders edged 0.1 percent lower in August reflecting a 0.2 percent rise for durable goods (unrevised from last week's advance report) and a 0.3 percent decrease for nondurable goods which is the new information in today's report.

But there is also new information on the durable sides and that's an unwanted downward revision to core capital goods (nondefense ex-air) where new orders are moved from last week's initial 0.2 percent decline to a 0.4 percent drop. This reading will support those on the Federal Reserve who, specifically concerned about a downturn in business investment tied to global demand for US exports, want to push for an extension of rate cuts.

Other readings in today's report include a second straight marginal rise of 0.1 percent in backlogs and a 0.1 percent dip in shipments. Inventories at least are not showing an unwanted build, coming in unchanged after subdued 0.1 percent builds in the prior two months.

Year-to-date factory orders are down 0.1 percent and, based on signals from anecdotal manufacturing reports such this morning's PMI or Tuesday's ISM, appear at risk of turning more deeply lower.