The Department of Commerce will release Factory Orders at 10:00 a.m. ET, with a consensus expectation for a gain of 1.7 percent, and a range from 0.7 percent to 2.5 percent according to Bloomberg News. A key category that reflects business investment plans posted a modest rise.
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The report on factory orders in the month of June came in with a gain of 1.8%. Factory activity has been stymied by a strong dollar and spending cuts in the energy sector after last year’s sharp plunge in crude oil prices. The jump, however, was fueled by a surge in demand for commercial aircraft, a volatile sector that can swing widely from month to month. The lower oil prices have led energy companies to scale back their investment plans.
Manufacturing inventories increased a solid 0.6 percent, which was more than the government assumed in its second-quarter GDP snapshot published last week.
Manufacturing, accounting for about three quarters of total US industrial output, has been under pressure from tepid consumer spending and a stronger dollar weighing on exports.
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“We are moving past the very weak period for the manufacturing sector from early on this year, but that activity has yet to meaningfully increase”, said Daniel Silver, an economist at JPMorgan in New York. The figure for durable goods measures orders for items meant to last at least 3 years, big-ticket things like appliances and jet engines. Orders for nondurable goods such as chemicals, paper and clothing, rose 0.4 percent after no increase in May.
