US durable goods orders rebound more than expected

New orders for manufactured durable goods in the US jumped 3.1% month-over-month to $282.3 billion in January 2025, marking the strongest increase in six months and surpassing market expectations of a 2% rise. This rebound followed a downwardly revised 1.8% decline in December, indicating a solid recovery in demand for big-ticket items despite ongoing economic uncertainties.

US durable goods orders rebound more than expected

The surge was primarily driven by transportation equipment, which soared 9.8%, led by a remarkable 93.9% spike in orders for nondefense aircraft and parts, highlighting strong demand in the aviation sector. Motor vehicles and parts also contributed to the gains, rising 2.4% after declining in the previous month. Beyond transportation, orders for capital goods climbed 10.7%, reflecting increased business investment in long-term assets. Orders also advanced in primary metals (1%), computers and electronic products (1.7%), machinery (0.2%), and electrical equipment, appliances, and components (0.1%), suggesting steady demand across key manufacturing segments. However, excluding transportation, overall new orders were virtually unchanged, indicating that the broader manufacturing sector remains uneven.

Orders ex-defense goods rise

Excluding defense-related goods, new orders rose by 3.5%, signaling robust private-sector demand. Additionally, core capital goods orders—non-defense capital goods excluding aircraft, a closely watched proxy for business spending—rose 0.8% in January, surpassing market expectations of a 0.3% increase. This suggests that firms remain willing to invest in equipment and infrastructure despite lingering concerns about interest rates and economic growth. Overall, the strong durable goods report points to resilience in the manufacturing sector, with business investment showing signs of stabilization after a period of volatility. However, continued momentum will depend on factors such as inflation trends, interest rate policies, and global supply chain conditions.