Durable Goods Orders

What Are Durable Goods Orders?

Durable Goods Orders (DGORDER on FRED) is the Census Bureau's monthly measure of new orders received by US manufacturers for products designed to last three or more years. The headline series is highly volatile because aircraft and defense orders can swing 50%+ in any single month.

The most useful sub-aggregates are Durable Goods Ex-Transportation (excluding the volatile aircraft and motor vehicle components) and Non-Defense Capital Goods Ex-Aircraft (the cleanest read on business investment intentions). The latter, often called "core capital goods", is the FRED ticker NEWORDER.

Why It Matters for Markets

Durable goods orders is a leading indicator of manufacturing activity and business investment. New orders are received before the goods are produced, so order trends signal future production and shipment activity. Core capital goods orders are a primary input to GDP forecasting, particularly the business fixed investment line.

For markets, the release moves manufacturing-sensitive equities and the dollar on release day. Strong core capital goods prints support the soft-landing thesis and risk-on equity positioning; weak prints raise capex-cycle and recession concerns.

How to Read the Print

Core capital goods orders. The cleanest read on business investment. The 3-month moving average smooths the noise; year-over-year changes show the trend.

Headline vs ex-transportation gap. A widening gap signals an aircraft or auto-driven anomaly that may not reflect the broader manufacturing trend. The ex-transportation series is the cleaner gauge.

Shipments and unfilled orders. Published alongside new orders. Unfilled orders rising while shipments stay stable signals a manufacturing backlog (positive for future production); shipments rising while unfilled orders fall signals a backlog drawdown (potentially negative if not replenished by new orders).

Historical Context

Durable goods orders averaged approximately 4-6% nominal annual growth during the 2010-2019 expansion. The pandemic shock produced a 35% peak-to-trough decline in headline orders, then a sharp rebound. Core capital goods orders peaked in early 2022 and have run broadly flat to slightly negative through 2024-2025, reflecting the manufacturing-sector weakness despite overall economic strength.

The flat core capital goods orders pattern through 2024-2025 has been a key business-cycle puzzle: services and labour markets strong, manufacturing weak. The divergence reflects the rate-sensitivity of capital investment (higher rates discourage new equipment purchases) combined with consumer-spending rotation away from goods toward services post-pandemic.