Fed economist: ‘Wild swings’ in durable goods spending due to tariffs

HOUSTON — Despite industry tailwinds, macroeconomic uncertainties are creating volatility in durable goods spending, the senior business economist at the Federal Reserve Bank of Chicago told attendees at Equipment Finance Connect 2026 today.  

Spending on durable goods, which include transportation equipment and heavy machinery, totaled $322.2 billion in March, up 0.7% month over month but down 7.2% year over year, according to an April 29 report by the U.S. Census Bureau.  

Through the first quarter, durable goods spending increased 7.3% year over year to $931 billion, despite three straight MoM declines prior to March. 

There have been “wild swings” in durable goods spending over the past year, “pretty much all tariff related,” the economist, Martin Lavelle, said in a presentation at the conference. 

“In 2025 we saw the boost in comparisons with consumers trying to get ahead of actual or potential tariffs, and now we’re on the backside of those comparisons,” he said. 

Swings in consumption are especially prevalent in commercial vehicle and IT equipment sectors, Lavelle said.  

The volatility coincides with “modestly inflationary” conditions tied to durable goods in recent months, he said. Further, equipment industries are grappling with surging fuel and energy costs, he added. 

Nonetheless, “a few sectors” are buoying the overall equipment industry, with AI-related investments, particularly data centers, driving demand for construction and industrial assets, Lavelle said.  

Equipment Finance Connect 2026 concludes May 19. Follow coverage at equipmentfinancenews.com.