US core capital goods orders exceeded forecast in December

US orders for business equipment increased in December by more than projected, suggesting solid capital investment at the end of last year as trade policy uncertainty gradually diminished.

The value of core capital goods orders, a proxy for investment in equipment that excludes commercial aircraft and military hardware, increased 0.6% in December after a revised 0.8% gain a month earlier that was twice as much as previously estimated, Commerce Department figures showed Wednesday.

The median forecast in a Bloomberg survey of economists called for a 0.3% increase for December.

Bookings for all durable goods — items meant to last at least three years — fell 1.4%, reflecting a decline in orders for aircraft. Boeing Co. said it received more orders for its planes in December than a month earlier, but the data don’t always correlate with the planemaker’s monthly figures. Orders excluding transportation equipment matched the biggest gain since September 2024.

Meanwhile, non-defense capital goods shipments including aircraft, which feed directly into the equipment investment portion of the gross domestic product report, rose 1.8%. Rather than orders that can be canceled, the government uses data on shipments as an input to GDP.

Economists expect business investment to pick up this year as companies take advantage of tax provisions in President Donald Trump’s One Big Beautiful Bill Act enacted last year. Investment related to artificial intelligence is also expected to remain solid.

The durables report showed a fairly broad increase in bookings, including for communications equipment, computers, metals, electrical equipment and machinery. Bookings for motor vehicles rose by the most since June.

“The rise was broad based, but leading the way, once again, were categories closely related to the AI-buildout,” Thomas Ryan, North America economist at Capital Economics, said in a note.

The durables report showed core capital goods shipments, a less-volatile metric of business investment that excludes planes and military hardware, rose 0.9% in December. Over the final three months of the year, shipments of core capital goods increased an annualized 8.2%.

Economists prefer the core equipment shipments and orders figures because they offer a clearer picture of the underlying trend in business investment and the impact on the economy.

Durable goods orders increased 7.8% in 2025 compared with a year earlier, the strongest advance since 2022. The value of core capital goods bookings climbed 3.5%, also the most in three years.

— By Mark Niquette (Bloomberg)