US Factory Orders Jump 2.4% In July

Factory Orders Jump 2.4% In July

U.S. factory orders jumped 2.4% in July, after the month before was upwardly revised to a 0.4% drop (previously down 0.8%). It also was better than the consensus expectation of a 1.8% increase and our 2.0% forecast. Total factory orders are up 12.6% year to date. The durable orders component was upwardly revised to a 4.1% increase from a 4.0% gain previously reported and is up in two of the past three months. The 43.4% jump in civilian aircraft orders explains most of the overall jump, though auto orders were also up 9.8%, indicating that supply disruptions from the Japan crisis are starting to ease. Capital goods orders, excluding defense and aircraft, which is a leading indicator for business spending, was upwardly revised to a 0.9% drop in July (was down 1.5%). Nondurable orders were up 1.0% in July and are up 15.1% year to date. Together with the better-than-expected Chicago ISM/PMI reading, it will likely provide further support to stock prices today.