Factory orders for the month of December fell as you would expect for the current economy.  But the results were even worse than weak estimates out there.  They fell 3.9% rather than the 3.4% decline economists expected.  On an ex-transportation basis, the drop-off was 4.4% and the durable goods figures were revised to a decline of 3.0% from fall of 2.6%.

This marks the fifth consecutive month of declines.  But there is something interesting here.  Because the front months in 2008 remained higher, the full year 2008 factory orders showed a gain of 0.4%.  That means that we are likely to see negative comparisons for a few more months before these even start to look normalized.  Don’t be too surprised if these continue to look bad on a year-over-year basis through summer. 

Jon C. Ogg
February 5, 2009