Orders for durable goods soar, but some uncertainty remains

Durable goods orders for November were released Monday, after a government shutdown delayed the Census Bureau report.

Durable goods are basically bookings for U.S.-made products meant to last three years or more — that includes computers, machinery and even planes. These orders were way up in November.

New durable goods orders shot up more than 5%, after falling in October. You can chalk a lot of that up to a surge in bookings for new planes from Boeing. (Those numbers can be pretty turbulent.)

But exclude the whole transportation sector, and new orders were still up 0.5% in November. That’s not a blip, said Oren Klachkin, a financial market economist at Nationwide.

“When you look under the surface there’s definitely signs that business spending is up,” he said.

Klachkin said a big chunk of that spending comes from artificial intelligence, for data centers and computers.

Orders for machinery were also up. Richard de Chazal, an economist at the investment firm William Blair, said factory owners put off buying new equipment for years.

“So the plant equipment, machinery they have is quite old. And they need upgrading,” he said.

De Chazal said some companies are upgrading now because of more generous deductions under the GOP’s new tax law. But other Trump administration policies on things like tariffs and disputes over Greenland are still causing uncertainty, which largely held back durable goods orders last year.

“Uncertainty is still going to remain a corrosive on business investment. But I would say that there are still a lot of other forces at play that are positive for equipment orders going forward,” said Bernard Yaros, lead U.S. economist at Oxford Economics.

Yaros said those positive forces will win out. Unless we go back to sky-high tariff rates that hold businesses back.