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US factory orders monthly
The US Factory Orders Index is an economic indicator published monthly to measure the change in purchase orders for materials and equipment by factories in the United States. It gives an indication of the size of the demand for factory products, and thus production and manufacturing activity.
In the event that the US factory orders index exceeded expectations in a monthly measurement, this indicates:
• Increased demand for American factory products. This means that economic activity increases and job opportunities improve.
• Increasing production in factories to meet the high demand. Hence, greater job opportunities in the manufacturing sectors.
• Increasing business and consumer confidence, which leads to increased demand and economic growth.
• Expectations of higher profits for manufacturing companies, which may push their shares to rise in the financial market.
• Increased spending and commercial activity in general due to the improvement in the pace of production and demand for commodities.
In the event that the US Factory Orders index comes out less than expected on a monthly basis:
• This indicates a decrease in demand for US factory products. This may reflect a slowdown in economic activity.
• Factories may reduce their production pace due to low demand. This may lead to loss of profits and loss of job opportunities.
• Low business and consumer confidence. Which reduces the pace of spending and consumption activity.
• Expectations of lower profits for manufacturing companies, which may pressure their shares to decline in the financial markets.
• Decreased spending and commercial activity in general due to the slowdown in production and demand for commodities.
In general, lower than expected US Factory Orders is a negative sign for the US economy and may suggest contraction prospects in US GDP.
How does the monthly US factory orders index affect the trading of the US dollar in the forex market?
The US Factory Orders Index can be used in trading the US dollar as follows:
• If factory orders exceed expectations, this indicates a strong economy and recovery. This may push the US dollar higher against other currencies.
• If factory orders fell below expectations, this indicates weakness in the US economy. This may lead to a decline in the US dollar.
• Factory orders data gives early indications of the strength of the US economy. Thus, it helps investors and currency traders to make their decisions regarding the dollar.
• This data can be used to support short-term trading strategies around the dollar, as it gives guidance on whether the dollar is likely to rise or fall in the short term.
The body responsible for issuing the US Factory Orders monthly index
The US Factory Orders Index is released monthly by the US Department of Commerce, specifically its Bureau of Industry and Trade Analysis.
The US Department of Commerce is responsible for collecting economic data and statistics relating to trade and industry from businesses and factories. And then publish official data on indicators such as factory orders, production and industrial inventories. The Department of Commerce receives questionnaires from commodity manufacturers that include the volume of orders they receive per month. Based on this data, the change in factory orders is calculated month by month, and the index is officially published. Thus, the US Department of Commerce is responsible for issuing the monthly factory orders index that is available to the public, the media, and the currency markets.
The date of the release of the US Factory Orders monthly index
Released monthly, about 35 days after the end of the month
Next release
Jan 5, 2024
