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Durable Goods Orders Fall

  • Durable goods orders in the US decreased by 4.5% in January after a 5.1% increase in December. Transportation equipment orders were the main driver of the decline, falling by 13.3% in January. The 4.5% decline is the worst data point since the pandemic in April 2020.
  • Excluding transportation equipment, durable goods orders increased by 0.7% in January, with a spike in orders for computers and related products and machinery. In addition, orders for non-defense capital goods, excluding aircraft, increased by 0.8% in January, indicating positive business spending.
  • The decline in durable goods orders, particularly for transportation equipment, may indicate a temporary slowdown in economic activity. However, the increase in orders for computers and machinery suggests that businesses are still investing in equipment and infrastructure.
  • While the data is evidence of a slowing economy, there may be a silver lining in the weakening demand for durable goods’ effect on inflation.

Source: Helios Quantitative Research, Bloomberg