Durable goods order stumble

March 13, 2026

January durable goods orders came in flat, missing consensus expectations for a 1.1% rise. December durable goods orders were revised higher to show a 0.9% drop from down 1.4%. Excluding transportation, orders rose 0.4%. December orders were revised higher to 1.3% from 1%, suggesting better underlying strength in the data.

Transportation orders declined almost one percent, led by a 0.4% drop in orders for motor vehicles and parts. Orders for civilian aircraft jumped 3.8%, helping to blunt some of the weakness in autos. The motor vehicle sector faces a challenging year due to the high cost of vehicles, rising running costs and elevated financing rates. The average transaction price of a new vehicle is near $50,000.

The breakout of the US-Iran conflict has sent gasoline prices soaring. The price of unleaded gasoline rose 80 cents to $3.63 a gallon, up from $2.80 in mid-January. The price shock will likely keep some new car buyers on the sidelines. 

The only other decline showed up in electrical equipment orders, down 0.6%. That follows strong gains of 1.9% and 1.1% in December and November, respectively. We expect this category to remain one of the better performers this year due to ongoing data construction demand. 

Orders for computers and electronics rose 0.8%, benefiting from demand for cutting edge AI models. Industrial orders firmed. Primary metals orders rose 0.8%, fabricated metals increased 0.6% while machinery orders added 0.2%. Defense orders decreased sharply by 11.8% but they will likely experience a strong pick-up in the coming months due to replenishment needs.

Two other developments took away some of the luster in the strength for ex-transportation orders. Nondefense capital goods orders excluding aircraft, a proxy for capital spending, were flat, missing expectations for a 0.5% increase. Business leaders could temper their investment as crude oil prices near $100 per barrel amid little sign the conflict is easing.

Nondefense capital goods shipments excluding aircraft slipped 0.1%. The soft reading suggests business fixed investment in the first quarter could be on a weaker footing. For the fourth quarter, nonresidential fixed investment in the GDP report was revised lower to 2.2% from 3.7%, erasing some of the momentum that trickled into the new year.