Factory Orders +0.1% vs 0.1% Est — Core Capex Holds +1.6%, Refineries Carry Nondurables

Fundamentals · 2026-10-02

Factory orders +0.1% m/m vs 0.1% est to $663.5B, a second straight gain, after July revised to +0.8% from 0.9%; ex-transportation +0.3%, July revised to +0.7% from 0.6%; durable goods revised to -0.1% from flat in last week's advance report, to $338.5B; nondurables +0.3% to $325.0B, with petroleum and coal products +1.4% supplying all of it; core capital goods orders +1.6% to $87.6B, unchanged from the advance; core capital goods shipments revised to +0.5% from +0.6%; total shipments virtually unchanged at $658.6B, ending eight straight gains; unfilled orders +0.6% to $1,609.6B, up 25 of 26 months; inventories +0.5% to $972.4B, up 11 straight months; inventories-to-shipments 1.48 from 1.47; next full report Tuesday 3 November.

What It Changes

• Nothing on the headline. Orders rose 0.1%, exactly as forecast, and it came out 90 minutes after a payrolls report that missed on every line. It will not move the rate path.
• The nondurables gain is oil prices, not more goods. Petroleum and coal shipments rose $0.9 billion, the whole of the $0.9 billion nondurables gain. Excluding them, nondurable shipments were flat. Census data are not inflation-adjusted, and August PCE showed energy prices up 2.3%.
• The capex story survived the revision. Core capital goods orders stayed at +1.6% in the full report, and core shipments were trimmed only a tenth, to +0.5%. Business equipment demand is still the strongest part of US manufacturing.
• The inventory build is in the pipeline, not on the shelf. Materials and work in process are rising, while finished goods are below a year ago. That is factories stocking up to fill orders, not goods going unsold.

Impact

• USD — Slight bullish — the core-capex line confirms domestic business investment is strong, but an in-line headline cannot compete with this morning's payrolls miss, which sets the dollar's direction today.
• Core capital goods orders are up about 17% annualized over three months, on Census's rounded monthly rates. That supports the growth side of the hiking case even as the labour side weakens.
• US Indices (ES / NQ / YM / RTY) — Slight bullish — stronger equipment orders are good for earnings, and the read is strongest for YM, where industrials and machinery makers carry the most weight.
• Turbines, generators and power transmission equipment orders rose 3.5%, and heating and cooling equipment 1.7%. Both are lines tied to data-centre and power-grid buildout.
• The soft spot is the consumer: consumer durable goods orders fell 2.2%, with automobile shipments down 3.3% and light trucks down 2.6%.
• Gold (GC) — Slight bearish — firm capex supports real yields at the margin, but this release is small next to payrolls, which point the other way for gold today.

Inside The Number

New orders for manufactured goods rose $0.7 billion, or 0.1%, to $663.5 billion in August, matching the Trading Economics consensus of 0.1% (MarketWatch had 0.2%). It is the second straight monthly gain. July was revised down a tenth to +0.8%. Excluding transportation, orders rose 0.3% to $549.4 billion, and July's ex-transport gain was revised up to 0.7%.

The durable side was revised down slightly. Last week's advance report had durable goods orders virtually unchanged; the full report has them down 0.1%, or $0.2 billion, to $338.5 billion. Transportation drove it, falling 0.7% to $114.1 billion on non-defence aircraft (-4.3%) and ships and boats (-2.7%). Fabricated metal products were revised to -1.4% from -1.3%.

The nondurable side was oil. Nondurable orders, which Census sets equal to shipments, rose $0.9 billion or 0.3% to $325.0 billion. Census names the driver: petroleum and coal products, up 1.4% to $70.7 billion, rising in seven of the last eight months. Take petroleum out and nondurable shipments were $254.3 billion in August against $254.4 billion in July, essentially flat. Food (-0.2%), beverages (-0.6%) and pharmaceuticals (-1.4%) all fell; chemicals rose 0.2%. These are dollar values, so a refinery line that is up 16.9% year to date in an energy-led inflation is mostly measuring price.

Core capex was confirmed. Non-defence capital goods excluding aircraft rose 1.6% to $87.6 billion, the same as the advance estimate, after +0.6% in July and +1.7% in June. Core shipments, which feed the equipment line of GDP, were revised to +0.5% from +0.6%, to $85.0 billion, after +1.4% and +2.4%. Core orders running $2.7 billion ahead of core shipments means more shipments to come. Core unfilled orders rose 0.9% to $316.9 billion, 5.4% above a year ago.

Shipments stalled for the first time in nine months. Total shipments were virtually unchanged, down less than $0.1 billion, to $658.6 billion. Durable shipments were revised to -0.3% from -0.2%, with transportation down 1.8% on non-defence aircraft deliveries (-8.6%) and light vehicles. Excluding transportation, total shipments rose 0.4%.

Inventories rose for an 11th month, and the composition matters. Total inventories rose 0.5% to $972.4 billion, and the inventories-to-shipments ratio ticked up to 1.48 from 1.47. By stage, materials and supplies rose 0.7% and work in process 0.9%, while finished goods rose only 0.1%. Against a year ago, materials are up 3.7% and work in process 5.7%, while finished goods are down 0.7%. Manufacturers are building inputs and partly finished goods to work through a backlog, not piling up products they cannot sell. That is a different picture from the wholesale inventory overhang this feed has documented, which sits one step further down the supply chain.

The Internals

New orders, seasonally adjusted:

Category · August, $B · August · July · June · Consensus

All manufacturing · 663.5 · +0.1% · +0.8% · -0.2% · +0.1%

Excluding transportation · 549.4 · +0.3% · +0.7% · -0.1% · n/a

Excluding defence · 638.3 · +0.1% · +1.0% · -0.3% · n/a

Durable goods · 338.5 · -0.1% · +0.9% · +0.6% · n/a

Nondurable goods · 325.0 · +0.3% · +0.7% · -0.9% · n/a

Core capital goods (non-defence ex-aircraft) · 87.6 · +1.6% · +0.6% · +1.7% · n/a

Non-defence capital goods · 100.5 · +1.2% · +2.3% · +0.6% · n/a

Defence capital goods · 21.5 · -1.5% · -6.4% · +3.6% · n/a

Consumer goods · 269.4 · -0.3% · +0.7% · -1.1% · n/a

Consumer durable goods · 51.4 · -2.2% · +0.4% · -0.4% · n/a

Information technology · 30.4 · +0.1% · -0.5% · +3.3% · n/a

Construction materials and supplies · 71.6 · -0.3% · +0.8% · -0.4% · n/a

Advance report against full report, August:

Series · Advance, 25 Sep · Full report

Durable goods orders · 0.0% · -0.1%

Core capital goods orders · +1.6% · +1.6%

Core capital goods shipments · +0.6% · +0.5%

Durable goods shipments · -0.2% · -0.3%

Unfilled orders · +0.6% · +0.6%

Durable inventories · +0.5% · +0.5%

New orders by industry, seasonally adjusted:

Industry · August, $B · August · July · Year to date vs 2025, not adjusted

Primary metals · 32.6 · +1.2% · +2.1% · +15.3%

Aluminum and nonferrous metals · 12.9 · +1.7% · +0.8% · +22.6%

Fabricated metal products · 45.0 · -1.4% · +0.4% · +8.9%

Machinery · 45.5 · +1.1% · +1.5% · +13.0%

Construction machinery · 5.0 · +7.2% · -8.6% · +14.7%

Mining, oil field and gas field machinery · 1.9 · +9.5% · +2.2% · +37.6%

Industrial machinery · 5.2 · -7.5% · +9.9% · +39.3%

Heating, ventilation and refrigeration equipment · 7.4 · +1.7% · +1.3% · +18.4%

Turbines, generators and power transmission · 5.7 · +3.5% · -1.6% · +15.9%

Computers and electronic products · 30.9 · 0.0% · -0.6% · +14.7%

Computers · 1.8 · +1.0% · -2.1% · +18.3%

Non-defence communications equipment · 5.0 · +0.7% · +1.6% · +37.6%

Electrical equipment, appliances and components · 19.0 · +1.1% · 0.0% · +6.8%

Household appliances · 2.3 · -3.1% · +0.5% · -1.8%

Transportation equipment · 114.1 · -0.7% · +1.2% · +4.3%

Non-defence aircraft and parts · 18.8 · -4.3% · +12.0% · -22.1%

Defence aircraft and parts · 6.1 · +5.9% · -13.0% · +16.4%

Motor vehicle bodies, parts and trailers · 33.8 · +0.8% · +0.4% · +9.3%

Ships and boats · 6.1 · -2.7% · +6.4% · +17.3%

Nondurable goods · 325.0 · +0.3% · +0.7% · +5.8%

Nondurable shipments by industry, seasonally adjusted:

Industry · August, $B · August · July · Year to date vs 2025, not adjusted

Petroleum and coal products · 70.7 · +1.4% · +2.2% · +16.9%

Chemical products · 87.3 · +0.2% · +0.2% · +6.6%

Pharmaceuticals and medicines · 26.1 · -1.4% · -0.1% · +11.4%

Food products · 90.6 · -0.2% · 0.0% · +1.0%

Beverage and tobacco products · 18.4 · -0.5% · +0.5% · +3.4%

Paper products · 19.4 · +0.3% · +0.8% · +2.0%

Plastics and rubber products · 26.2 · 0.0% · +0.1% · +3.0%

Nondurables excluding petroleum · 254.3 · 0.0% · n/a · n/a

Nondurables excluding petroleum is computed from Census's levels ($254,344M against $254,391M in July).

Shipments, seasonally adjusted:

Category · August, $B · August · July · June

All manufacturing · 658.6 · 0.0% · +0.8% · 0.0%

Excluding transportation · 549.2 · +0.4% · +0.7% · -0.1%

Durable goods · 333.6 · -0.3% · +0.9% · +1.0%

Transportation equipment · 109.4 · -1.8% · +1.1% · +0.5%

Automobiles · 12.8 · -3.3% · -1.3% · +1.4%

Light trucks and utility vehicles · 22.3 · -2.6% · +1.2% · -2.1%

Heavy duty trucks · 4.4 · +6.9% · +8.6% · -0.3%

Core capital goods · 85.0 · +0.5% · +1.4% · +2.4%

Non-defence capital goods · 95.5 · -1.3% · +1.4% · +1.9%

Defence capital goods · 19.7 · +0.5% · +0.2% · +4.5%

Backlog, stock and ratios, seasonally adjusted:

Measure · August · Change · vs year ago, not adjusted

Unfilled orders, total · $1,609.6B · +0.6% · +8.8%

Unfilled orders, core capital goods · $316.9B · +0.9% · +5.4%

Unfilled orders, defence capital goods · $229.5B · +0.8% · +11.7%

Inventories, total · $972.4B · +0.5% · +2.7%

Inventories, durable goods · $608.3B · +0.5% · +3.0%

Inventories, nondurable goods · $364.0B · +0.5% · +2.2%

Inventories, petroleum and coal products · $49.0B · +2.5% · +10.6%

Inventories-to-shipments ratio, all manufacturing · 1.48 · from 1.47 · n/a

Unfilled orders-to-shipments ratio, durables · 6.87 · from 6.81 · n/a

Inventories by stage of fabrication, all manufacturing:

Stage · August, $B · August · July · vs year ago, not adjusted

Materials and supplies · 366.0 · +0.7% · +0.2% · +3.7%

Work in process · 276.3 · +0.9% · +0.8% · +5.7%

Finished goods · 330.0 · +0.1% · +0.3% · -0.7%

Where The Orders Came From

Power and cooling equipment kept growing. Turbines, generators and power transmission equipment orders rose 3.5% to $5.7 billion and are up 15.9% year to date. Heating, ventilation and refrigeration equipment rose 1.7% and is up 18.4%. Both sell into data-centre construction and grid upgrades, and both have backlogs growing faster than the factory sector overall: refrigeration and HVAC unfilled orders are up 31.7% on the year.

Mining and oilfield machinery jumped 9.5%, and is up 37.6% year to date, with unfilled orders 61.5% above a year ago. Construction machinery rose 7.2% after an 8.6% drop. Industrial machinery fell 7.5% after rising 9.9% in July, but remains up 39.3% for the year.

The communications and computer lines are still growing fastest within electronics. Non-defence communications equipment orders are up 37.6% year to date and computers 18.3%, against 7.3% for all ex-transport orders. Semiconductor orders are not in this release; Census does not collect them.

Defence is lumpy month to month and strong over the year. Defence capital goods orders fell 1.5%, but they are 41.8% above last year to date and defence unfilled orders are up 11.7% on the year. Defence search and navigation equipment orders are up 30.1% year to date.

The consumer side is where orders are falling. Consumer durable goods orders fell 2.2% to $51.4 billion, with automobile shipments down 3.3% and light trucks down 2.6%. Household appliance orders fell 3.1% and are down 1.8% year to date. Consumer durable inventories are 2.8% below a year ago, so manufacturers are not building stock for that demand either.

Refineries carried the nondurable side. Petroleum refinery shipments rose 1.2% to $65.9 billion and are up 18.7% year to date, against 5.8% for all nondurables. Refinery inventories rose 2.4%. With energy prices up 2.3% in August's PCE data and gasoline up 4.4%, much of that gain is price.

Against This Morning's Open

• The Open carried factory orders at 0.1% (Trading Economics) and 0.2% (MarketWatch) against a 0.9% prior. The Trading Economics figure was exact; the prior was revised to 0.8%.
• It said "Nothing else on the calendar is likely to compete with 08:30." This release did not: an in-line headline and an unchanged core-capex figure 90 minutes after a payrolls miss.

What This Sets Up

• Advance durable goods for September: Tuesday 27 October, 08:30 ET. The question is whether core capital goods orders post a fourth straight gain after +1.7%, +0.6% and +1.6%.
• Next full report: Tuesday 3 November, 10:00 ET, with the September nondurables and inventories.
• What would break the capex read: a core-orders decline that is not explained by one industry, or core shipments falling below core orders for long enough to shrink the backlog.
• The petroleum line: with WTI back near $90 this week, refinery shipments will keep pushing the nondurables total around on price. Read nondurables excluding petroleum for the underlying trend.

What Is This?

• What it is: The Census Bureau's full report on manufacturers' shipments, inventories and orders (the M3 survey), covering about 4,700 reporting units at roughly 3,000 companies. It arrives about a week after the advance durable goods report, revises those durable figures, and adds nondurable goods, inventories by stage of fabrication and the inventory-to-shipments ratios. Release CB 26-150, covering August 2026.
• Why it matters: The headline rarely moves markets, because the durable half is already known from the advance report. The value is in the revisions to core capital goods, which feed the equipment line of GDP, and in the inventory detail, which shows whether stock is building because of demand or because goods are going unsold.
• How to read it: Data are seasonally adjusted but not inflation-adjusted, so a gain can be price rather than volume, especially in petroleum. Nondurable orders equal nondurable shipments by Census's definition, so the nondurables line is really a shipments number. Census publishes no confidence intervals, because the panel is not a probability sample, and semiconductor orders are excluded.

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_For informational purposes only. Not investment advice._