Factory Orders: New Orders Increase Moderately

Bottom Line: Factory orders increased moderately in January (largely due to a climb in aircraft orders within durable goods orders, as previously reported). The growth rate has still been declining over the past 15 months and is now -1.9% year-over-year. Factory Orders ROSE by 1.6% in January, compared with market expectations for an increase of 2.1%. Durable goods orders climbed by 4.9%, as previously reported, while nondurable goods orders slipped by 1.6%. Excluding orders for defense goods, civilian aircraft and petroleum products, (so called) core factory orders ROSE by 1.3%. Factory orders are now 1.9% BELOW their year ago level and the year-over-year growth rate has improved modestly over the past year (from -3.7% a year ago to the current -1.9%). Nondefense Capital Goods Shipments and Nondefense Capital Goods Shipments excluding aircraft, proxies for capital spending, ROSE by 3.8% and FELL by 0.4%, respectively. The January level is slightly above its Q4 average, after a moderate decline in equipment and software spending in the Q4 GDP report. Factory Inventories FELL by 0.4% and the Inventory-to-Shipment Ratio FELL to 1.36 from 1.37.