U.S. core capital goods orders exceeded expectations in December, durable goods orders fell 1.4%.

U.S. core capital goods orders exceeded expectations in December, durable goods orders fell 1.4%.

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U.S. corporate equipment orders rose more than expected in December, indicating solid capital investment performance at the end of last year as trade policy uncertainties eased.

Data released by the U.S. Department of Commerce on Wednesday showed that “core capital goods orders”—a measure of equipment investment (excluding commercial aircraft and military equipment)—grew by 0.6% in December. The revised figure for November was a 0.8% increase, double the previously reported growth. The median forecast from economists surveyed by the media was for a 0.3% increase in December.

All durable goods (items with a lifespan of at least three years) orders fell by 1.4%, mainly reflecting a decrease in aircraft orders, though this was better than expected. Boeing reported more aircraft orders in December than the previous month, but government data does not always fully align with Boeing’s monthly figures. Orders excluding transportation equipment posted the largest increase since September 2024.

Meanwhile, shipments of non-defense capital goods including aircraft grew by 1.8%. This indicator is directly counted in the equipment investment portion of the U.S. Gross Domestic Product (GDP) report. Unlike orders that could be canceled, the government uses shipment data to calculate GDP.

Economists expect corporate investment to rebound this year, as companies take advantage of tax provisions from the “One Big Beautiful Bill Act” passed by President Trump last year. Additionally, investments related to artificial intelligence are expected to remain robust.

The durable goods report showed a broad range of order growth, including communications equipment, computers, metals, electrical equipment, and machinery. Motor vehicle orders reached their largest increase since June. Regarding the latest data, analysts said: “This growth is broad-based but once again led by categories closely related to AI development.”

The report also showed that core capital goods shipments (excluding aircraft and military equipment—a less volatile indicator of corporate investment) increased 0.9% in December. Over the final three months of last year, shipments of core capital goods grew at an annualized rate of 8.2%.

Economists prefer core equipment shipment and order data because these indicators more clearly reflect the underlying trends of corporate investment and their impact on the economy.

In 2025, durable goods orders are expected to increase by 7.8% year-on-year, the largest gain since 2022. The value of core capital goods orders is expected to rise by 3.5%, also the largest increase in three years.

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