“Murkiness” on Durable Goods Orders Persists

By SBE Council at 27 August, 2025, 5:23 pm

by Raymond J. Keating -

Trying to figure out what's coming next on international trade remains a challenge for entrepreneurs, businesses and investors. As a result, various strategies are implemented to limit or hedge against actual and potential costs, while trying to stay on top of opportunities.

As result, much of the economic data includes a great deal of noise, and we're all left trying to figure where things are and might be headed.

This is evident in the latest Census Bureau report on durable goods manufacturers' shipments and orders. It was noted, "New orders for manufactured durable goods in July, down three of the last four months, decreased $8.8 billion or 2.8 percent to $302.8 billion… This followed a 9.4 percent June decrease." As noted in the following chart from the report, for five months, it's been roller-coaster.

[Link]

This certainly isn't good news. But at the same time, when drilling down, the story turns a bit mixed. For example, when excluding transportation, new orders increased 1.1 percent in July, but if we exclude defense, then new orders decreased 2.5 percent.

In looking at this monthly report, I like to focus on capital goods - i.e., goods used to make other goods, or investment goods. There is a great deal of volatility here as well. New orders for capital goods jumped by 48.7 percent in May, and then declined by 22.6 percent in June and fell by 8.8 percent in July.

Zeroing in on a key metric related to investment - i.e., nondefense capital goods excluding aircraft, which serves as an indicator for private investment in equipment and software in forthcoming GDP data. These orders actually increased by 1.1 percent in July, after a June decline of 0.6 percent. And so far this year (as noted in the following chart), these orders have generally meandered, but were still up as of July. That's something positive.

[Link]

Source: Federal Reserve Bank of St. Louis, FRED

In an earlier analysis, I noted that durable goods orders were on "a wild ride." That ride continues.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of " The Weekly Economist " book series, and 10 Points from Walt Disney on Entrepreneurship .