After 6 months of MoM drops (something not seen outside of a recession), February saw a modest 0.2% rise in Factory orders which has spurred economists to extrapolate a 2.0% expectation for March. However, while Factory Orders rose 2.1% in March, Feb was revised lower (to a -0.1% drop) leaving US Manufacturing Orders down 4.0% YoY. The series of YoY drops continues (now at 5 consecutive months) to indicate a recessionary environment. The ratio of inventories-to-shipments remains stuck at extremely elevated levels.
For those curious how Factory Orders “beat” rising by 2.1% compared to the 2.0% expected, and yet the final dollar number was still below the expected one, the answer is simple: when you revise the base number lower, a 2.1% increase is not nearly enough.
Leading to a “beat” MoM, even if in dollar terms it was a miss, and will lead to a downward GDP revision.
Year over Year, this is the 5th consecutive monthly drop… hint: recession.
And Inventories to Shipments suggests all is not well