Durable Goods Orders Explained

Orders for big-ticket items — planes, machinery, appliances — offer an early read on business investment, but the headline number is notoriously choppy.

What counts as a durable good

The Durable Goods Orders report, published monthly by the Census Bureau, tracks new orders placed with US manufacturers for goods expected to last three years or more — everything from aircraft and industrial machinery to appliances and computers. Because it measures new orders rather than completed sales, it's a forward-looking signal: a manufacturer taking a large order today is committing to production that will show up in output and shipments months down the line.

The report covers both consumer-facing durables, like cars and appliances, and business-facing capital equipment, which is where the more market-relevant signal tends to live.

Why core capex orders get the attention

The headline durable goods number is heavily skewed by aircraft orders, particularly commercial jet orders from Boeing, which can swing by billions of dollars based on a single large order or cancellation in a given month. That volatility makes the headline figure nearly useless as a standalone read on the broader economy.

Economists and traders instead focus on "core capex orders" — non-defense capital goods orders excluding aircraft — which strips out both the volatile aircraft component and lumpy government defense contracts. This subset is widely treated as one of the best available monthly proxies for business investment intentions: companies that are optimistic about future demand tend to order more equipment, and a sustained uptrend in core capex orders has historically lined up with periods of expanding business investment.

Market impact and how to read the volatility

Because the headline figure is so choppy, markets typically shrug off large one-month swings unless the core capex component moves in the same direction, confirming a genuine shift rather than an aircraft-driven distortion. A sustained decline in core orders can raise concern about slowing business investment and, by extension, future GDP growth, weighing on industrial and manufacturing-sensitive stocks and occasionally pulling yields lower on growth worries. A sustained pickup does the opposite.

Given the noise, it's a report best read over a multi-month trend rather than any single release, and it's most useful in combination with other manufacturing data — ISM surveys, industrial production — rather than in isolation.

Shipments and unfilled orders, also included in the release, add further context: rising unfilled orders alongside steady bookings suggest factories are backlogged and running near capacity, while a build-up in inventories alongside soft orders can foreshadow production cutbacks in the months ahead.