Factory Orders Exceed Expectations

- Factory Orders for March rose .1% versus estimates of a 1.2% decline and a downwardly revised .5% fall in February.

Bottom Line: The .1% gain in factory orders is more evidence that economic growth is slowing to more sustainable and less inflationary levels. An 18% increase in orders for petroleum and coal products accounted for most of the “better-than-expected number.” However, today’s report also showed orders for capital goods excluding aircraft, a gauge of future business investment rose 10.4% from the first quarter of 2004. While the rate of increase is slower than last year, this is still a healthy gain.