The Commerce Department's "Factory Orders" report was released this morning, showing rather a rather anemic 0.3% increase in February orders. This was good news after January's 0.9% decline in orders (previously reported as -0.5%), but not nearly as robust as the 1.5% the market had predicted.
A closer look at the actual Commerce release (versus the positive AP spin) isn't so rosy. Take out defense orders and commerical aircraft, and factory orders failed to make it into positive territory.
However, what I personally found most interesting was the dramatic drop in non-durable factory orders, such as food and clothing, which fell a whopping 2% in February.
In light of our recent focus on gas prices, it had me wondering: While price hikes at the the pump might not particularly effect consumers purchases of large durable goods, such as cars, washing machines, etc., as people tend to finance those items, might they not impact the purchase of goods such as food and clothing? If you have less in your wallet/checking account/credit card limit due to the money you're pouring into your tank, how will it effect your consumer behavior? And are retail outlets which place these orders now reacting to a decrease in sales, or merely predicting a slow summer as gas prices creep higher?
Just something to thing about as you fill up with $2/gal regular this week.
Posted by MB Williams at March 31, 2004 01:45 PM | TrackBack