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January 28, 2025

Durable goods orders plummeted -2.2%, in December, the worst month since June and far below the consensus estimate of 0.6%. That marks the fourth time in five months that orders fell. The previous month was revised down to -2% from -1.1%. Last year, marred by strikes and production disruptions, logged a cumulative -1.5% drop from 2023.

Transportation and equipment orders dragged on overall orders, tumbling -7.4%. Civilian aircraft orders plunged -45.7% from an already paltry -20.1% in November. The largest aircraft producer posted its best month in a year; gains were offset by a surge in cancellations.

Defense aircraft orders rose slightly to extend a growth streak to three months. Orders for motor vehicles and parts continued declines that began in October. Excluding transportation, durable goods orders edged up 0.3%.

Other sectors showed mixed results. Coming off of a solid November, computers and related product orders slipped -1.4%, while communications equipment crept lower. Fabricated metals bounced back after the biggest decline in orders since January 2022, rising 1.2%. Machinery orders and electrical equipment, appliances and components orders moved higher.

Capital goods orders excluding defense and aircraft, which feed into the GDP calculation of business investment, rose 0.5% in December. That followed a stronger November gain, helped by threats of port strikes on the East Coast, which were averted.

Nondefense capital goods shipments excluding aircraft, rose 0.6% in December after increasing 0.4% in both October and November. Durable goods inventories climbed 0.4% following November’s strong showing.

The S&P Global purchasing managers' index (PMI) delivered a 50.1 reading in January on stronger factory production, employment and new orders. Readings above 50 signal expansionary conditions. This broke the streak of six consecutive months of readings below 50.