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Durable Goods Orders Fall 2.2% in December, Miss Market Forecasts

Published: Jan 28, 2025, 13:46 GMT+00:00

Key Points:

  • U.S. durable goods orders fell 2.2% in December, marking the fourth decline in five months and missing market forecasts.
  • Transportation orders plunged 7.4%, leading December’s $6.3 billion durable goods decline to $276.1 billion.
  • Excluding transportation, durable goods orders rose 0.3%, showing resilience in non-transportation manufacturing sectors.
  • Core durable goods growth lagged forecasts, increasing 0.3% instead of the expected 0.4%, signaling softer industrial activity.
  • Excluding defense, durable goods orders fell 2.4%, highlighting broad demand weakness across key manufacturing segments.
US Durable goods

Durable Goods Orders Fall in December, Miss Market Expectations

New data from the U.S. Census Bureau reveals that durable goods orders decreased by 2.2% in December, falling short of market expectations and marking the fourth decline in the past five months. Total new orders dropped by $6.3 billion to $276.1 billion, following a 2.0% decrease in November.

More Information in our Economic Calendar.

Transportation Sector Drives Decline

The transportation equipment sector led December’s contraction, with orders plunging by $6.9 billion, or 7.4%, to $86.1 billion. Excluding transportation, however, new orders increased by 0.3%, signaling resilience in other manufacturing categories. Transportation’s continued weakness, now down four of the last five months, underscores the challenges in this pivotal segment.

Core Orders Miss Expectations

Core durable goods, which exclude volatile transportation items, were forecast to rise by 0.4%, but actual growth came in at a muted 0.3%. Similarly, total durable goods orders were expected to increase by 0.3% but instead posted a significant contraction. Excluding defense, new orders dropped 2.4%, further highlighting subdued demand across sectors.

Implications for Traders

The decline in durable goods orders could signal softening industrial activity, potentially influencing broader market sentiment. The transportation sector’s underperformance may weigh on related equities, while the slight growth in core orders suggests modest strength in non-transportation manufacturing. Traders should monitor economic indicators and corporate earnings from the manufacturing sector for additional insight.

Short-Term Market Outlook

The data presents a bearish short-term outlook for manufacturing-related assets, particularly in transportation-focused industries. However, the resilience in core orders may cushion broader market impacts. Persistent weakness in transportation and defense orders could maintain downward pressure unless offset by policy support or stronger consumer demand.

About the Author

James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.

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