Confidence You Can Measure: A Look at Durable Goods

What Are Durable Goods?

In economic terms, durable goods are items designed to last three years or more. Think cars, appliances, computers, machinery, and aircraft. Because these products are expensive and long‑lasting, people and businesses usually don’t buy them on impulse—they plan ahead.

That planning makes durable goods especially useful to economists and investors. When orders rise, it often signals confidence: consumers feel secure enough to make big purchases, and businesses are willing to invest in equipment and expansion. When orders fall, it can suggest caution or uncertainty about the economic outlook.

Why Durable Goods Matter to the Economy

Durable goods orders are reported monthly by the US Census Bureau as part of the Manufacturers’ Shipments, Inventories, and Orders report. The data is considered a leading economic indicator, meaning it can offer clues about where economic activity may be headed next.

Markets pay close attention for a few key reasons:

• Consumer confidence: Big‑ticket purchases tend to rise when households feel financially secure
• Business investment: Orders for machinery and equipment often signal future production and hiring plans
• Market expectations: Strong or weak readings can influence expectations for economic growth and interest rates

Because some categories, especially aircraft and defense, can swing sharply from month to month, economists often focus on “core” measures such as orders excluding transportation or non‑defense capital goods excluding aircraft.

January 2026 Snapshot

In the most recent report, new orders for US manufactured durable goods were essentially flat in January, totaling about $321 billion. This followed a decline in December and came in weaker than expectations for a rebound.

At first glance, a flat reading may look uninspiring, but the details matter.

• Orders excluding defense also rose, pointing to continued private‑sector activity
• Orders excluding transportation increased modestly, suggesting underlying demand remained steady

A Closer Look at the Drivers

The lack of growth in the headline number was largely driven by transportation equipment, which declined during the month. Aircraft orders, in particular, tend to be lumpy and can distort the overall picture.

Outside of transportation, several categories showed resilience:

• Metals and fabricated products posted gains
• Computer and electronic equipment saw modest increases

One of the most closely watched components, non‑defense capital goods excluding aircraft, often viewed as a proxy for business investment, was unchanged after rising the prior month. That suggests companies are still investing, but not accelerating their spending.

What This Tells Us About the Economy

The latest durable goods report points to an economy that is cooling, but not stalling.

Businesses appear cautious, choosing to maintain current investment levels rather than expand aggressively. Consumers and firms continue to spend selectively, particularly on essential or productivity‑enhancing equipment.

In other words, confidence hasn’t disappeared, but it also hasn’t surged. For markets, this kind of data supports a wait‑and‑see environment, where growth continues at a measured pace rather than reaccelerating sharply.

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