Factory orders dove 1.7% in February as reported today by the US Census Bureau.
The weakness did not stop with the headline number. January orders were revised lower to 1.2% from 1.6%.
Core capital goods plunged a whopping 2.5%, and shipments fell 0.7%.
Factory orders fell nearly in line with the Bloomberg Econoday consensus reading of -1.6% but economists did not take into account January revisions.
Factory orders fell 1.7 percent in February, more than reversing what was a strong January which, however, is revised 4 tenths lower to a gain of 1.2 percent. February weakness includes a 0.4 percent drop in non-durable orders, one that reflects weakness in petroleum and coal products, and a steep 3.0 percent decline in durable orders which are revised 2 tenths lower from the advance release of minus 2.8 percent.
The February report makes for uncomfortable reading with orders for core capital goods falling 2.5 percent and pointing to continuing trouble for business investment. Other readings include a sharp 0.7 percent fall for total shipments, a 0.3 percent fall for unfilled orders, and a 0.4 percent fall for inventories though the latter is actually a positive given the decline in shipments and keeps the inventory-to-shipments ratio at 1.37.
This year’s fall in the dollar did nothing to visibly boost February’s data though there are hints of relief in last week’s giant surge for the ISM new orders index, one that points to a significant rebound in this report for March.
Factory Orders and Shipments
Economists were close to the headline number after reading the advance report that came out on March 24.
Core Capital Goods, Shipments, Inventories
- Core Capital goods (non-defense capital goods excluding aircraft) were down year-over year for the 12th consecutive month. The last positive reading was January 2015.
- Month-over-month shipments fell for 8 straight months.
- Month-over-month inventories fell for 8 straight months.
Inventory-to Shipments Ratio
Don’t worry, it’s just a manufacturing recession.
Mike “Mish” Shedlock
Maybe its the weather……..
Too hot, too cold or just too damned nice outside? Regardless, it always the weather that drive our economic malaise.
Tony Bennett said:
“there are hints of relief in last week’s giant surge for the ISM new orders index, one that points to a significant rebound in this report for March”
Recessionary Inventories / Sales: Bring It!
Ron J said:
“Don’t worry, it’s just a manufacturing recession.”
Famous quote: “It’s confined to subprime”.
Our economy feels like standing on a wooden pallet in the middle of a lake waiting for it to get water logged and sink as the Fed desperately dumps a million barrels of oil into the water trying to keep it afloat.
Revise the previous months down and add that to this month. If you need any more we can book some military missiles and fighter jets.
Just more of the Knights Who Say Nee claiming it’s only a flesh wound.
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