Durable Goods Orders
Durable goods orders measure new purchase orders placed with U.S. manufacturers for goods expected to last three or more years, serving as a leading indicator of manufacturing activity and business investment.
The Advance Report on Durable Goods Manufacturers' Shipments, Inventories and Orders is released monthly by the U.S. Census Bureau, typically around the 26th of the month for the prior month's data. It is one of the most important leading indicators of business capital spending, manufacturing health, and overall economic momentum.
Durable goods are defined as products with an expected useful life of three years or more — aircraft, machinery, computers, military equipment, automobiles, and household appliances all qualify. Because these purchases represent large capital commitments, businesses and consumers typically delay or accelerate them depending on their confidence in the economic outlook. This sensitivity makes new orders for durable goods a forward-looking indicator: when orders rise, manufacturers are expected to ramp up production in coming months; when orders fall, the pipeline of future output contracts.
The headline durable goods figure can be extremely volatile because commercial aircraft orders from Boeing — which can amount to dozens of multi-hundred-million-dollar planes — can swing the total dramatically from month to month. For that reason, economists and market participants focus closely on two sub-measures: orders excluding transportation equipment (which removes the aircraft distortion) and orders for nondefense capital goods excluding aircraft, often called 'core capex.' The latter is widely regarded as the best monthly proxy for business fixed investment plans and feeds directly into the BEA's GDP calculations.
Strong core capex orders suggest that businesses are confident enough to commit to long-term capital projects, expanding their productive capacity. Weak or declining orders signal caution, potential margin pressure, or deteriorating demand expectations. A sustained downturn in durable goods orders has historically preceded recessions by several months.
For investors, the durable goods report provides insight into industrial companies, aerospace and defense contractors, technology hardware manufacturers, and capital equipment suppliers. Strong readings tend to support cyclical sectors while weak readings can weigh on industrials and materials stocks.