Today's Report (09/04/2021)

New orders for manufactured goods in August, up fifteen of the last sixteen months, increased $6.2 billion or 1.2 percent to $515.7 billion, the U.S. Census Bureau reported today. This followed a 0.7 percent July increase. Shipments, also up fifteen of the last sixteen months, increased $0.3 billion or 0.1 percent to $508.3 billion. This followed a 1.5 percent July increase. Unfilled orders, up seven consecutive months, increased $11.9 billion or 1.0 percent to $1,239.4 billion. This followed a 0.5 percent July increase. The unfilled orders-to-shipments ratio was 6.86, up from 6.81 in July. Inventories, up fourteen of the last fifteen months, increased $4.1 billion or 0.6 percent to $749.3 billion. This followed a 0.6 percent July increase. The inventories-to-shipments ratio was 1.47, unchanged from July.

What is it?

Represent the dollar level of new orders for both durable and nondurable goods. Durable goods are items that last 3 or more years. PCs, cars, phones etc.

What are the fundamental effects?

If orders drop off, factories risk being idle, and companies owning these plants can quickly lose money. If demand for factory goods is strong, assembly lines will remain in full operation and the manufacturer can generate sales income.

How does it affect the markets?

CURRENCY - Generally muted.

STOCKS - Equity investors prefer to see Factory Orders validate other signs of economic strength as this could translate into higher corporate earnings.

BONDS - Bond prices might inch higher if Factory Orders conform with other evidence that the economy is weakening.