Factory orders

Release Date: Usually comes out 35 days after the end of the month under review
Release Time: At 11am US Eastern Time
Released By: The US Census Bureau


The Factory Orders report is a monthly report issued by the US Census Bureau unit of the Department of Commerce. This report is measures the change in the total value of new orders placed with manufacturers to purchase their goods.

This report provides broad-based, monthly statistical data on economic conditions in the domestic manufacturing sector, and also measures current manufacturing activity. It therefore provides an indication of what future business trends are at any particular time.

There are two components of this report. An advance report is released to the market about one week before the full report, which is released 35 days after the month ends. This means that the released report measures the activities for the month preceding the last month prior to release of the report. The report released on March 6 covers the factory orders for January 2014.

Time of Release

The Factory Orders report usually comes out 35 days after the end of the month under review. The time of release is 11am US Eastern Time. The data is released on this webpage of the US Census Bureau and also on independent news feeds from Bloomberg and Thomas Reuters.

Interpreting the Data

This report has a moderate market impact and so cannot be directly traded off the charts when it is released. However, it’s a leading indicator of production and manufacturing data.

When factory orders are rising, it is a sign that the factory’s products are in demand, consumers like the products and are spending, or there is a great market for the factory’s products. This will improve the revenue stream of the company, enable company growth and expansion and also continue to keep workers on the payroll. All these are good for the US Dollar. If factory orders are dropping, the negative aspect of the cascade described above will hold and this is USD negative. This report usually contains a revision of the Durable Goods Orders data released about a week earlier, and fresh data regarding non-durable goods.

Conclusion

More important than simply trading on whether the actual reading is lower or higher than expected, is the pattern of the report over several months. If Factory Orders are showing steady improvement or steady decline over a period of months, then this is quite significant. It also pays to know which types of factory products are being steadily ordered for or being steadily shunned.