Durable goods orders fall for third month in a row

Each month, the federal government measures durable goods orders — orders placed with domestic manufacturers for everything from industrial machinery to washing machinery.

According to the latest data from the U.S. Census Bureau for February, orders were down 1.4%. It’s the third straight monthly decline, a pattern that predates the war in the Middle East.

Durable goods orders can be very volatile month to month.

“One large order at Boeing, and it looks like we're doing well,” said Ari Shwayder, who teachers economics at the University of Michigan. “And one bad order at Boeing, and we're falling out of the sky, if you'll excuse the metaphor.”

Shwayder said looking over a longer time horizon, orders have declined in four out of the last five months.

“This could be taken as an indicator that things are slowing down,” he said.

But that slowdown is uneven, said Jason Miller, a supply chain management professor at Michigan State University.

“A lot of sectors that are more sort of consumer-centric are in maybe a little bit of a weaker condition than what they were heading into last year at this time,” he said.

But business investment, especially in technology, is strong. Think AI and automation.

The business investment measure, called core capital goods orders, increased about 0.5% in February.

“It’s important to remember that February is a pre-war reading,” said Bernard Yaros, lead U.S. economist at Oxford Economics.

Yaros said the data still has to catch up with higher energy prices.

“The trajectory for capital spending by businesses is not going to be as robust as it would have been in the absence of all the geopolitical tensions in the Middle East,” he said.

And there’s not much room to maneuver, said Hitendra Chaturvedi, a supply chain management professor at Arizona State University, because tariffs are still taking a bite out of economic growth.

“At this moment, we are barely holding our head above the water,” he said.

If the energy shock caused by the war in the Middle East persists, Chaturvedi said that “things could go south very, very fast.”

The silver lining, analysts said, is that AI spending and new tax breaks for capital expenditures should prop up business investment — for now.