Core capital goods new orders dip as tariffs slow business activity

New orders for core capital goods dipped slightly in February, while shipments, unfilled orders and total inventories ticked up as businesses await further clarity on tariffs.  

February’s seasonally adjusted value of core capital goods orders, excluding aircraft and defense equipment, was $75 billion, down 0.3% month over month following a January increase that was revised to 0.9% from 0.7%, according to the Monthly Advance Report on Durable Goods Manufacturers’ Shipments Inventories and Orders, released by the U.S. Census Bureau today.  

Core Capital Goods – Shipments & New Orders

Seasonally adjusted new orders for durable goods landed at $289.3 billion in February, up 0.9% MoM after a revised 3.3% rise in January. The durable goods reading indicates a slight improvement in market conditions, but the overall state of goods new orders points to investment concerns amid tariff uncertainty, according to a Wells Fargo research note. 

“While some of the gain may signal a front-running of tariffs by businesses, we expect the strength more so reflects normal volatility and a rebound after some weak data,” the note stated.   

The dip in core capital goods orders signaled “a bit of a weaker trend in underlying capital investment demand than implied by the headline growth rate,” the note also said.  

Seasonally adjusted shipments for core capital goods totaled $74.7 billion in February, up 0.9% MoM after a revised 0.2% decline in January, according to the durable goods report. Meanwhile, seasonally adjusted shipments for durable goods were $292.3 billion, up 1.2% MoM following a revised 0.7% increase in January. 

As shipments rebound, the outlook for equipment investment remains strong, according to the Wells Fargo note. 

“Producers have, however, continued to churn out orders, reflected in strong durable shipments,” the note stated. “On a three-month annualized basis, core capital goods shipments are up 2.9%, which marks the fastest growth rate since 2020.” 

Unfilled orders, total inventories jump 

Seasonally adjusted unfilled orders for core capital goods reached $268.3 billion in February, up 10 basis points (bps) from January, following a 40-bps revised increase in January by the Census Bureau. Seasonally adjusted total inventories for core capital goods hit $163.5 billion in February, up 20 bps after January was revised to a 10 bps decline. 

Seasonally adjusted unfilled orders for durable goods totaled $1.4 trillion in February, up 10 bps MoM after a revised 20 bps rise in January, according to the report. Seasonally adjusted total inventories for durable goods finished at $533.2 billion in February, up 10 bps compared with the previous month following a revised 2 bps rise in January. 

Core Capital Goods – Total Inventories & Unfilled Orders

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