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Factory Orders  
Released On 12/6/2018 10:00:00 AM For Oct, 2018
PriorPrior RevisedConsensusConsensus RangeActual
Factory Orders - M/M change0.7 %0.2 %-2.0 %-2.2 % to -1.7 %-2.1 %

Held down by downturns in the defense goods and also civilian aircraft, factory orders sank 2.1 percent in October. The split between the report's two main components shows a modest 0.3 percent increase for nondurable goods -- the new data in today's report where the gain is tied to printing and petroleum -- and a 4.3 percent drop for durable orders vs 4.4 percent in last week's advance report for this component.

Orders for defense goods have fallen 16.4 and 16.2 percent the last two reports but follow a giant 48.8 percent surge in August that was tied to aircraft. Orders for civilian aircraft in October and September have fallen 22.2 and 19.1 percent but here too follows an outsized gain in August, of 63.7 percent.

Core capital goods (nondefense ex-aircraft) are mostly weak in today's report, with orders unchanged following declines of 0.6 and 0.2 percent in the prior two months. But core shipments, which are direct inputs into fourth-quarter GDP, did rise 0.3 percent for a respectable opening to fourth-quarter business investment.

Areas of strength in October include sharp order gains for fabrications, computers & electronics, and also electrical equipment. Other readings include a marginal 0.1 percent rise in factory inventories which will offset very strong October builds for retailers and wholesalers and will limit October's contribution to GDP inventory. Both total shipments and also total unfilled orders posted soft 0.1 percent declines.

Monthly swings in aircraft can badly cloud results this report which focuses attention on the smoother reading of year-on-year change. This remains solidly positive at a 6.9 percent gain for total orders which, however, is down from 7.5 percent in September and a 4-year high of 10.3 percent in August. But a little slowing at year-end won't dim manufacturing's central contribution to the strength of the 2018 economy.

Consensus Outlook
Advance data for the durables side of the October factory orders report showed a very sharp 4.4 percent drop, reflecting a reversal for defense aircraft and step backwards for primary metals and machinery. Forecasters see factory orders in October, which will include initial data on non-durable goods, falling 2.0 percent.

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
Shipments fluctuate less than new orders but underlying trends for both series reveal themselves in year-over-year change.
Data Source: Haver Analytics

2018 Release Schedule
Released On: 1/52/23/64/45/36/47/38/29/610/411/212/6
Release For: NovDecJanFebMarAprMayJunJulAugSepOct

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