Factory Orders: Rebound as Expected
August 3, 2017
Bottom Line: Factory orders rebounded as expected after contracting for two months. With this stronger print and positive revisions the 3-month average is now in-line with the 12-month averages, suggesting capital investments are still growing at a modest to moderate pace. Nondefense capital goods shipments in Q2 were modestly above Q1 levels, confirming the modest increase in equipment spending that was reported in the advance Q2 GDP report.
Factory Orders ROSE by 3.0% in June, compared with market expectations for an increase of 3.0%. The prior month's loss was revised higher from -0.8% to -0.3%.
Durable goods orders climbed by 6.4%, as previously reported, while nondurable goods orders slipped by 0.3%. Excluding orders for defense goods, civilian aircraft and petroleum products, (so called) core factory orders were nearly unchanged.
Factory orders are now 9.8% ABOVE their year ago level but the year-over-year growth rate has rose moderately over the past year (from -6.4% a year ago to the current 9.8%).
The Q2 average for nondefense capital goods shipments is modestly above its Q1 level, compared with a slight increase in equipment spending that was reported in the advance Q2 GDP report.
Article by Contingent Macro Advisors