Factory Orders Scream Recession... And This Is How A Big Miss Was Avoided

Even without digging too deep into the factory orders number, it was dreadful: while "rising" 1.9% monthly, or in line with expectations, the series posted its 18th consecutive annual decline. A stretch of declines this long has never happened before in US history without the economy being in concurrent recession.

 

However, since we always enjoy peeking behind the headlines, we noticed something typically fishy. As noted above, the factory orders data met expectations of a 1.9% sequential increase. There was, however a catch. Taking a look at the headline factory orders series reported in June vs May, one notices a substantial revision lower to the series.

 

Zooming one one finds precisely how the Department of Commerce made sure the series "met" the expectations.

Because while Wall Street was expecting a bounce of 1.9% from the original March print of $458.4 billion, or a number which would have been $467 billion, instead it got a 1.9% bounce... from the downward revised $451.8 billion. In other words, instead of a "meet" of 1.9%, if one used the original April print, the sequential increase in May was only 0.5%.

Then again, with the US economy in recession, even we wonder why we are splitting hairs.