Factory Orders: Still Robust, Inventories Building

Bottom Line:  The June Factory Orders report surprised to the upside with positive revisions as the volatile automobile sector continued to rebound after supply-induced slowdowns. This June report offers the potential for upward revisions to the 2nd Quarter GDP tally. That said, most reports suggest manufacturing activity has slowed notably since June. Production of durable and nondurable goods has remained moderate, but new order growth relative to inventories suggests a potential slowdown in activity once manufacturers work through order backlogs.