Core capital goods orders slip as business spending remains stagnant

ile, New and unfilled orders for core capital goods slipped slightly in October, while shipments and total inventories ticked up as business capital expenditures remained sluggish.  

October’s seasonally adjusted value of core capital goods orders, excluding aircraft and defense equipment, was $73.7 billion, down 0.2% month over month following a September increase that was revised to 0.3% from 0.7%, according to the Monthly Advance Report on Durable Goods Manufacturers’ Shipments Inventories and Orders, released by the U.S. Census Bureau Nov. 26.  

Core Capital Goods – Shipments & New Orders

A possible boost to core capital goods could be on the horizon, as they experienced an increase of more than 7% between October 2016 and October 2017 following President Donald Trump’s election victory over Hillary Clinton, according to a Wells Fargo research note. While another increase remains uncertain, this week’s durables goods report lowered the starting point, the note stated. 

“Despite this continued profitability, we have yet to see a renewed acceleration in business CapEx spending,” according to Wells Fargo. “Not only was that a disappointing outturn in light of the modest gain that had been expected, but also the decline came despite the fact that September’s gain of 0.7% was pared to a more modest 0.3% increase.” 

Seasonally adjusted shipments for core capital goods also totaled $73.7 billion in October, up 0.2% MoM after a revised 0.1% decrease in both September and August, according to the durable goods report. The weak performance in core capital goods shipments, both including and excluding aircraft, creates more concern to start the fourth quarter, according to the research note from Wells Fargo. 

“The shipments data were just as bad with core capital goods shipments (including aircraft) sliding for the third consecutive month,” according to the research note. “This sets us up for some tough base effects in terms of fourth-quarter growth and leaves equipment investment off to a rocky start in Q4.” 

Seasonally adjusted new orders for durable goods landed at $289.6 billion in October, up 0.2% MoM after a revised 0.4% drop in September. Meanwhile, seasonally adjusted shipments for durable goods were $285.2 billion, down 0.6% MoM following a revised 0.8% decline in September. 

Unfilled orders, total inventories  

Seasonally adjusted unfilled orders for core capital goods reached $266.2 billion in October, down 0.6 basis points (bps) from September, following a 10-bps revised increase in September by the Census Bureau. Meanwhile, seasonally adjusted total inventories for core capital goods hit $163.2 billion in October, up 4 bps after a September revision to a 0.1% decline. 

Seasonally adjusted unfilled orders for durable goods totaled $1.4 trillion in October, up 0.4% MoM after a revised 0.3% rise in September, according to the report. Seasonally adjusted total inventories for durable goods finished at $527.7 billion in October, down 4 bps compared with the previous month following a revised 0.2% decrease in September. 

Core Capital Goods – Total Inventories & Unfilled Orders

Following the Federal Reserve’s interest rate cuts in September and November, durable goods and core capital goods should rebound following 2024 sluggishness, according to the Wells Fargo note. 

“It has been a tough couple of years for the durable good space after demand had been pulled forward during the stimulus-fueled post-pandemic era and as interest rates hovered near 20-year highs,” the note stated. “After years of below-trend investment, some pent-up demand ought to spur a degree of spending, and lower interest rates could push that along.” 

The third annual Equipment Finance Connect at the JW Marriott Nashville in Nashville, Tenn., on May 14-15, 2025, is the only event that brings together equipment dealers and lenders to share insights, attend discussions on crucial industry topics and network with peers. Learn more about the event and register here.